On 12th June, Elon Musk, the founder & Chief Executive of Tesla Motors announced that the company was making its entire collection of patents available to all, in the spirit of the advancement of electric vehicle technology. This decision could have widespread implications for the electric car industry, which has struggled to make much headway against the vast volumes of petrol & diesel cars currently being sold. It opens the door for other manufacturers to collaborate with Tesla, presumably without onerous royalty payments for every car sold. Indeed, Tesla are already making electric systems for Daimler and Toyota.
Whilst Tesla’s decision to give away their patents sounds, and almost certainly is, an extremely magnanimous gesture, it also reflects the reality that Tesla are a niche manufacturer who are, on their own, unlikely to achieve the volumes of scale necessary to make mass sales of electric cars a reality, so partnership in some form with traditional volume car manufacturers is necessary if they are to become a big player. An interesting parallel to this lies in the smartphone world, where Apple were traditionally market leader, their cutting-edge technology supported by a raft of closely-guarded patents. Yet along came a new player, Google, who created the Android platform, however instead of similarly protecting Android by a proliferation of patents, they made it “open source” to the rest of the worlds technology industries. The result – the spectacular growth of Android – and behind it, Google – to the point of now challenging, if not beating, Apple for product sophistication & market leadership.
What is Tesla’s equivalent technology to Android? Quite simply, it is that their patents may just hold the key to unlocking the potential for volume sales of electric cars, until now held back in the minds of most potential owners firstly by the high cost of such cars, despite Government subsidies, secondly by worries over running out of power mid-journey. The first concern, high prices, is an inevitable factor of the present low volumes of cars sold, as and when volumes increase, economies of scale will drive prices downwards. The second concern, of “range anxiety”, is more challenging, and it is here that Tesla patents could be incredibly useful to the rest of the car industry given the companies present technological leads in both battery and charging systems, where they claim major improvements over other manufacturers.
In terms of range, for example, the Tesla Model S luxury saloon recently introduced into the UK offers a range of up to 312 miles against 124 miles for the Nissan Leaf, both tested to the same NEDC (New European Driving Cycle) test standard. Tesla have achieved this improvement in range through intensive battery development, presently using lots of small energy-dense cylindrical lithium-ion batteries similar to those found in laptop computers, rather than fewer larger, but less energy-dense batteries used by other manufacturers. This approach has several benefits: much more energy storage – and hence range – is available and significantly the price of the battery pack, according to Tesla, is halved, due to economies of production scale. The smaller cells are also easier to package into the car, not least because the smaller cells are inherently less dangerous than the bigger cells traditionally used which, because they contain more energy, need robust protection from potential accident damage which could result in fires. Rather than taking up valuable luggage or passenger space like a conventional electric vehicles battery pack, the Model S’s battery pack has effectively disappeared, since it comprises merely a flat slab that sits inconspicuously under the floor between the wheels and serves as part of the vehicle’s frame. Use of these small cells may sound simple and the sort of thing the three musketeers of Top Gear might knock up in an afternoon; the reality is much more difficult. For one thing, Tesla had to develop a way to wire together many thousands of separate cells, compared to several hundred of the larger cells. They also invented a liquid cooling system that snakes between the cells and can remove heat so quickly that a problem with one cell doesn’t spread to the others – these are the sorts of details where Tesla’s patents are potentially invaluable.
Innovative battery technology is not Teslas only unique selling point however. They have also expended vast amounts of R & D expenditure (and remember that Elon Musks’ personal wealth as the founder of eBay & Paypal means that the normal business rules of achieving reasonable payback times on such investment do not apply) into improving charging systems, developing their “Supercharger” system presently being rolled out which can deliver enough charge for 200 miles in about half an hour – compared to several hours to charge a competitive electric car to a much lower range at an ordinary station today. The first UK Tesla Supercharger site has in fact just opened at South Mimms Services on the M25, with further stations along the M4 corridor as far as Bristol due to come on stream by September 2014, giving a theoretical range coverage of the whole of England & Wales as far north as Leeds.
Musk envisages that freeing up his patents would enable the worlds electric car industry to be able to use, and add to, his Supercharger charging station network, although that would of course mean that all of those manufacturers would need to adopt Tesla battery & control technology in order to deal with the extremely high (135kW) current rating of the Supercharger system. A significant side benefit of this adoption for electric car users would be to standardize on charging point connections: at present there are an incredible thirty or so different standards, some compatible, some not. Any resolution to the twenty-first centuries version of the VHS versus Betamax battle is surely a vital step in increased uptake of electric vehicles. Manufacturers coming on board with the Supercharger network would also need to buy in to Musks’ business model for it, which is to provide the charging free to users but to factor the cost of the electricity consumed into the initial selling price of the car.
The global car manufacturing jury is out on Tesla’s bold offer, with product planners everywhere surely pondering the implications. Whether “all” patents really does mean “all” remains to be seen, for there already have been rumblings that Tesla’s work on small cylindrical battery cells with Panasonic may not, in fact be included in the offer. However, anything which helps the emergent range of electric cars to increase range, speed up charging, free up more interior space and reduce costs can only be a good thing for consumers.
It has just been reported that both Nissan & BMW are interested in working with Tesla to develop Tesla’s open-source rapid charging network. If confirmed, the buy-in of these two manufacturers is hugely significant could well be the kick-start to the new electric order of vehicles for us all.