Creating A Competitive Market

Tesla recently recognized that while the global demand for an entirely electronic car is there, the lack of electric stations make it a less desirable purchase for consumers. Thus to combat that, they made a huge decision to share its tech patents in hopes of creating competitive market. Check out this article by Economic Roundup that breaks down Tesla’s strategy in more detail.

Tesla’s Move Towards Open Source is Economically Sound

By Dave Ferriman

The question can always be asked, what’s the economic benefit of giving things away for free. This is the question most companies would ask when making open source anything. Canonical gives its enterprise and sever versions of Ubuntu, the company’s flag ship Linux distribution away for free. Free not only as in the code is open and free to modify, but the OS is given out free of charge. They use to even mail out CDs to people that couldn’t download their program. They sell services instead, such as if you need support. The forums are free and the Canonical support costs money. This seems to be working for them, but many would argue that having a multi-millionaire backer helps the most.

Now Tesla is doing the same thing with its tech, but with a catch. To create a competitive market, Tesla Motors is sharing patents and it’s likely the smartest move they can make.

Cars have really not evolved much from their creation. Sure, they look nicer, have air conditioning and are more comfortable, etc. However, they are also still powered by dirty oil. This works great for other car companies, but Teslas have no need to stop at a gas station. Their free electric stations for life are great, but only cover the smallest fraction of a percentage of land space gas stations cover. This is what happens when you make something everyone wants but there are not enough of them to create power stations all over America.

What is the solution? Create some honest competition. It’s not like Americans are going to stop using cars anytime soon. GM and Ford could also make cars using Tesla’s patents, and bam – Tesla has more stations. That’s the hook – they too will have to offer free power for life. But, what a deal! Trade in your old gas guzzler for the car of the future! And everyone wants the future.

With more competition in the market, more people will be able to buy Teslas, and who wouldn’t want the company that started it all? It will all come down to who can make the best car, not where can I fill up?

Look at electric cars today like cell phones of the past. When cell phones first came out, the question was, “Where can I use this?” As they became more popular, there were more cell phone towers, then better and better phones. Now people can and many do get rid of their land lines. Mobile is the future and that future is now. Don’t we want this in our cars? Yes, of course we do.