Elon Musk, the CEO of Tesla Motors, announced that Tesla is making its electric car patents available to all free of charge—a decision that, as Tyler Cowen remarked on his Marginal Revolution blog, could be as important as Henry Ford’s 1914 decision to pay auto workers the hitherto-unheard-of wage of $5 a day.
Elon Musk
Musk decided that it is more important to grow the market for electric cars than to use Tesla’s patents to dominate that market. I hope that decision pays off for Tesla as Henry Ford’s decision did for Ford, because it removes an obstacle to technological progress.
The original purpose of patents was to give inventors an incentive to share their secrets, in return for temporary monopolies on their inventions. But in recent years, the scope of patent protection has been extended by law to the extent that it stifles competition and economic growth. Maybe Musk’s business model will change that. I hope so. Good for him for trying!
LINKS
‘All Our Patents Are Belong to You,” the announcement by Tesla Motors CEO Elon Musk.
Tesla Making Patents ‘Open Source’ to Boost Electric Cars by Alan Ohsman for Bloomberg.
Tags: Electric Car Patents, Electric Cars, Elon Musk, Patents, Tesla Motors
Phil Ebersole's Blog 
June 13, 2014 at 10:50 am |
It’s only a matter of time when foreign manufacturers eventually line up to offer Tesla their parts, to the right specifications, and at the right time. What were the barriers to trade, and how much of taxpayers dollars were used in researching these expensive electric engines?
I just do not think that CEOs are capable of altruism when it comes to making business decisions.
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June 13, 2014 at 11:05 am |
Just to clarify, I do not think Elon Musk is acting altruistically, any more than Henry Ford was acting altruistically in 1914. I don’t expect entrepreneur to act altruistically, in the sense of sacrificing their own well-being for the public good.
Elon Musk is acting in accord with what he thinks is his enlightened self-interest. I hope he is right because, in this case, I think his action coincides with the public interest.
The philosopher Bertrand Russell wrote somewhere that if people really understood what was in their self-interest, their behavior would be less harmful to other people than what they mistakenly assume is in their self-interest. I think this applies here.
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June 13, 2014 at 2:44 pm |
Think about it, if electric cars become more widespread the economies of scale work in Tesla’s favor.
Currently, Tesla’s business model only works because government subsidies bring the high price of their very small scale production into affordable realms.
More electric cars mean more manufacturers of the parts and batteries, more charging stations and more acceptance of electric cars in general.
It’s a great business move, possibly the one that will save his business in the long run.
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June 13, 2014 at 4:56 pm |
Right you are. I don’t think most business people would have been perceptive enough to see the best way to help themselves is to help the whole industry.
In the same way, most business people in 1914 thought Henry Ford was a fool for unilaterally raising his line workers’ pay when he didn’t have to. But this gave Ford the stable, dependable work force that he wanted (as well as potential customers for Ford cars)
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