Ordinarily a company wouldn’t establish any kind of market dominance by giving away its designs. However, this is exactly what Tesla is doing, and it just might establish the electric car brand as the ultimate market leader. This might not be an obvious way to build a monopoly, but this particular brand is famous for building luxury and performance electric cars (something which had previously been thought of as an oxymoron) and thus isn’t accustomed to doing things traditionally.
But, even if a monopoly is Tesla’s final goal, the company’s conduct in the short-term seems decidedly devoted to doing good. Back in 2014, Tesla was so concerned with the industry’s lack of momentum that it opened up its patents to global use. The idea behind this was that its total transparency might urge other manufacturers to build similar cars, thus driving the market forward and going a long way to putting more electric cars on the road and decreasing carbon emissions.
Now, as 2016 starts rolling, we see that this might just have been step 1 in a genius plan that will allow Tesla to be an industry hero and leader all at once. This is based on step 2 of the plan, which involves software.
How Tesla Will Rule with Software
The car company recently released an app which connects owners to their cars remotely, allowing them to access certain functions. Through the app, owners can turn on their cars’ air conditioning or heat, or even arrange to meet the car at a specific point.
This has led to further app development from third-party developers which allow added features that benefit the community of drivers, such as apps that allow drivers to compare their driving data with other drivers.
Tesla’s opportunity lies in this third-party development. If the company were to give its software away for free, it would be in a great situation to benefit from apps being designed for other companies using Tesla’s design patents.
This is similar to the way Apple creates a great deal of its revenue. The company has a deal in which it collects 30 percent of purchases made through iOS apps. Similarly, Tesla could set up a deal in which it benefits from in-app purchasing, meaning it would benefit from every other manufacturer using its software.
Through this model, giving away its designs would give it market monopoly. Instead of competitors trying to compete, they would essentially be working for the company.
Time will tell whether Tesla chooses to go this route, but it certainly does present a very interesting opportunity for the company to consider.
Image credit: http://blog.caranddriver.com/tesla-unveils-the-d-every-model-s-now-offers-awd-including-staggering-691-hp-p85d/