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Tesla Motors opens door to electric vehicles’ technology secrets

Last updated: June 12, 2014 6:43 pm

Tesla Motors opens door to electric vehicles’ technology secrets

By Henry Foy, Motor Industry CorrespondentAuthor alerts

Electric carmaker Tesla Motors has taken the unprecedented step of opening its technology secrets to its rivals as chief executive Elon Musk attempts to boost interest in the low-emission vehicles.

Tesla, which has defied larger carmakers by making money out of its luxury electric vehicles, will allow competitors to use its patents in a gamble that it hopes will bring down industry costs and open new business opportunities.

“We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly evolving technology platform,” Mr Musk said. “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

The decision is characteristic of billionaire entrepreneur Mr Musk, who has a record of outlandish ideas and has stirred up the space industry with promises of reusable rockets and plans to colonise Mars.

Mr Musk has long stressed that his primary goal of widespread electric-car usage is more important to him than Tesla’s ultimate success. In offering its patents to rivals, he also hopes to create a larger market for electric cars, which would bring down the cost of the company’s charging infrastructure.

Tesla, which sold 22,500 cars last year, has seen its market capitalisation more than double over the past 12 months to $25bn, as investors bought into bullish growth predictions and high profit margins as volumes rise.

Tesla’s rise from technology start-up to car-industry darling has been rapid, but investors and industry experts reckon its long-term future depends on whether it can manufacture a successful low-priced, mass-market model.

Mr Musk has promised an electric car costing less than $35,000 within the next three years, a target that would require a sharp reduction in battery costs.

The company is also building a factory with the capacity to build 500,000 batteries a year, far more than it currently needs. Other groups using its technology could choose to source batteries from Tesla.

Tesla, based in Palo Alto, California, has worked with other carmakers in the past to help them develop electric cars, and has supplied batteries to Toyota and Mercedes-Benz’s owner Daimler. Both are shareholders in Mr Musk’s company.

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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