Electric-Car Makers Can Copy Tesla’s Patents—Can They Also Copy Its Success?

Elon Musk still stands to profit even if rivals mimic his company’s technology.

(Photo: Reuters)

Jun 17, 2014· 1 MIN READ
Michael Sugerman is a summer intern at TakePart and a student at the University of Michigan, where he reports for the school newspaper, The Michigan Daily.

Now that Elon Musk has handed the auto industry the keys to Tesla Motors' technology, will carmakers punch the accelerator and make electric vehicles mainstream?

The Tesla CEO announced his decision to make the company's patents available for public use in a June 12 blog post.

"Tesla Motors was created to accelerate the advent of sustainable transport," Musk wrote. "If we clear a path to the creation of compelling electric vehicles but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal."

But will opening its vehicle patents to other carmakers really have a significant impact? It depends, according the Joe Wiesenfelder, the executive editor of Cars.com, a website for auto buyers.

Wiesenfelder said that for companies already working to build and improve their electric vehicles, access to Tesla's designs may simplify or accelerate development.

He added a caveat. "I don't think Tesla's patents are enough to convince an automaker to dive into electric cars, because the cost goes so far beyond intellectual property," Wiesenfelder said in an email. "One of the biggest challenges in marketing electric cars is the per unit cost is so high and the [profit] margin so low."

While the patents offer a road map to rivals, Tesla's success is as much about how the company packages and deploys that technology as about the expertise of its engineers and other employees.

The Auto Alliance is an industry group that represents Ford, General Motors, Chrysler, and other big carmakers. Auto Alliance spokesman Wade Newton said he could not speculate on whether car companies will make use of Tesla's designs. He noted, however, that adopting new technologies is a formidable challenge for any automaker.

Veteran automotive journalist Micheline Maynard—the founder of Curbing Cars, a website that assesses the changing attitudes to transportation—said Tesla's patents may have little effect, particularly for auto companies that have already developed their own electric proprietary vehicle technology.

Even if competitors copy its technology, Tesla still stands to profit by selling them batteries, Wiesenfelder said.

"Tesla has some good technology, but current owners have paid handsomely for it," he said. "Nothing in their portfolio changes the fundamental challenges of EVs: cost of manufacture and comparatively minuscule demand."