Tesla Motors Inc., a California corporation registered in Delaware, announced Thursday its plans to treat its patents as an open source. The company CEO Elon Musk stated a wall of Tesla patents in the company headquarters “have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology.” The company will not initiate intellectual property lawsuits against any good faith users of the technology.

On the company blog, Musk stated that “Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property land mines behind us to inhibit others, we are acting in a manner contrary to that goal.”

The company believes that their patents have inhibited other competitors from creating similar vehicles. Competitors help expand a market and are not necessarily bad for business. Tesla cannot  single handedly make a dent in the existing market dominated by gasoline operated vehicles. As a result, relinquishing the patents to competitors could possibly help create both a larger market and higher demand for electric vehicles. “If we can do things that don’t hurt us and help the US industry, than we should do that.”

With less than 1% of all vehicles being electric cars, Tesla does not see a huge threat from competitors. Since the company introduced its first electric car seven years ago, Tesla still makes up less than 1% of the US car sales. The statistics help show that consumers are still apprehensive about the cars’ range and scarce charging stations.




Musk said his original intent of securing the patents was to prevent his company from being crushed and swallowed by larger automotive industry competitors. However Musk states, the effect of the patents have been just the contrary. The larger car companies are not interested in Tesla’s work. In order to allow its competitors to create some needed competition, Tesla will give away its patents to enhance creativity between other entrepreneurs.

From a tactical perspective, the company’s strategy makes sense. By creating competition, the company hopes to increase its own sales in the future. Without a variety of competitors in the market, Tesla will not be able to grow as a company.

Topics: Delaware, Intellectual Property, Small Business, Tesla