Once again, Tesla Motors’ founder Elon Musk has grabbed auto-industry headlines, this time for hinting at a broad patent release that could mean making Tesla’s electric cars more “open source.” It may seem a head-scratcher that a company whose success depends on its cutting-edge technology would give away its secrets, but as usual, there is a method to Musk’s madness. Tesla’s open patent play — like its dealer franchise battle, Gigafactory and Hyperloop concepts before it — are increasingly the firm’s most important “products.” Whereas cars take huge amounts of time and money to develop, Musk’s brash re-imaginations of the car industry cost little to produce and generate the same fevered public acclaim as the sleek, pricey Model S. In effect, Musk has monetized the public perception that change in the car business is long overdue.
When you ask auto-industry insiders about Musk’s affection for contrarian business models, they invariably roll their eyes. They see Tesla as too small to be anything more than a gadfly, and Musk as something between a well-intentioned amateur and a downright charlatan.
But bring up the car business with anyone who knows nothing about the car business, and it’s clear Musk’s new ideas are selling. Tesla may not enjoy even one percent of market share, but its “mind share” exceeds that of the biggest players, and Musk is by far America’s best-known car executive. (General Motors’ Mary Barra has high name recognition, though not for the right reasons). While Tesla’s hype-to-sales ratio is cause for some investor concern, it’s success holds valuable lessons for a car industry that has a long record of taking its eye off the ball.