Here at Luxury Living Magazine, we love cars. But we also realise the damage they can cause to the environment and our health.
Fortunately, there’s a big choice of electrical and hybrid cars available in todays market, largely to prepare us for the new UK Government ruling in nine years time when all cars bought must be electric.
One of the first electric cars to emerge, was Tesla. It became the trailblazer in electric vehicles.
Kyle Labourman examines one of the reasons why Tesla, as the most popular electrical car today, was able to ensure its success, focusing mainly on the release of its patents.
Electric cars are not a new phenomenon. In fact, the first electric car can be traced back to the 1830s, with Scottish inventor Robert Anderson coupling a typical horse carriage with an electric motor. However, it took until 2012, with the release of the Tesla Model S, for electric cars to really hit a mainstream audience. Though many electric cars had come before it, the Model S was the first car to draw the attention of petrol-heads. This was due to its electrifying pace, a 0-60 time of under 4 seconds. This sudden attention put the spotlight on Elon Musk and Tesla, as well as reigniting the whole electric car industry.
Of course, with success comes competition, and many companies such as BMW, Mercedes, and Audi flocked to get a piece of the new luxury electric car market. This poses a problem in terms of functionality. Each car company came to the market with their own approach – a new car, a new charger, a new way of charging, posing a problem for adoption, due to the concept of network externalities. Essentially, if there is no standard electric charger, for example, consumers are far less likely to invest in cars that use them, in case another charger is selected and their option becomes obsolete. This poses a huge risk for investing in an electric car, and thus, many decided not to take the risk. Their internal combustion engine car had a simple standard for providing energy, a fuel pump. How does an electric car company overcome this issue? Each company has its own ideas which they believe to be better. How do they come to a decision?
Elon Musk, the founder and CEO of Tesla at the time, provided a simple solution – releasing their patents. Initially, this seems like a questionable decision. Why would a company reveal valuable intellectual property for free, especially to its competitors? When you consider the implications, it is a smart business move. Providing all your information means competitors won’t need to invest large amounts of money in research and development, instead of adopting your standard.
This is an incentive for them as they save money, reducing investment in their own standard. This also sets the industry standards and stabilizes the market as the risk of obsolescence is removed from the equation. This one, simple move stabilized the electric car market, and it could be argued this is one of the main factors in the subsequent success of the luxury electric market from then on.
Can the success of the luxury electric car market be deemed completely down to Tesla and Musk’s actions? No. But the impact their decision made cannot be ignored. Simply put, it was a move of business excellence and a key example of how Tesla ensured electric success.
For further information on Tesla, please visit: www.tesla.com