Tesla may have found a way to boost its own market

by / Monday, 09 June 2014 / Published in Smartgrid-CI Blog

We now know about the “controversial” step forward Elon Musk promised he would take.

While five states are fighting to get Tesla’s $5B battery factory, Tesla founder Elon Musk promised that supercharger patents will be open. This means that anybody who wants to do development around this technology will be able to use it, very likely for a fee. This decision is important for three reasons:

1)      The electric car industry is not about batteries and wheels but about a whole environment in the development of which broad availability of charging stations is essential. Charging requires establishing numerous electric and connection rules. Fighting around these rules is a serious impediment to the development and installation of charging stations. This decision could have an impact on the whole charging industry.

2)      Tesla thinks it has a competitive advantage in charging technology and making the technology available will help the company keep ahead of the curve in triggering third party developments and, more importantly, it will give it a chance to control its market; in an ideal world, all chargers will become “Tesla compliant/compatible”.

3)      Tesla confirms that its core business is electric vehicles.

Elon Musk probably learned the lessons from the numerous companies in the past that unsuccessfully choose a proprietary strategy vs. an open strategy; Sony Betamax vs. VHS and IBM PS2 against the PC being two of the best known cases.

No doubt the EV market needs a boost. Will this decision be enough? At the end of the day, customers need to like the product. Making more supercharging stations available is one good step forward but the EV market will not take off as a mass market as long as EV’s will have limited autonomy and will cost an arm and a leg. According to Tesla a charge from a superchargers offer up to 170 miles of autonomy (to a Tesla car) in 30 minutes of charging. It is better than most conventional car/charger combination but not enough yet to turn EV’s into a mass market; too short an autonomy for too much time of charging.

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