Tesla Motors wants to dominate the global EV market with its own innovative technology and patents, however in addition to the enormous opportunities that the developing EV market promises the company faces serious risks going forward.
A dark horse suddenly appeared in the EV market which had previously been dominated by the traditional global automakers. It was Tesla Motors led by Elon Musk, who is often dubbed as the “second Jobs.” The company has made such an impact on the entire global auto industry so much that its current value (approx. $24B+) is now higher than that of Fiat-Chrysler (approx. $15B+), one of the major global automakers with more than 100 years of history.
Tesla and its competitors like BMW and BYD are approaching the global EV market with their own proprietary technologies. During the past few years these three companies have built different patent portfolios for power trains, batteries and charging stations. Actually, in terms of patent technology and marketing, Tesla is pursuing a different strategy than their competitors, which is why the global automotive industry is paying such close attention to them.
Tesla is at the center of the EV industry.
The entire automotive industry is paying close attention to Tesla because their EV technology is a bit different than those of existing manufacturers. Tesla’s core patents concern their battery system and management technology. Standing on its own technology, Tesla has designed and developed a small range of EVs noted not only for their performance, haute styling and advanced hi-tech features but also for safety. The company has also built a powerful patent barrier in terms of charging stations, the key to popularizing EVs.
The increase in the number of cited patents is in sync with the rise of the stock price.
In the past 10 years Tesla applied for and registered a total of 242 patents. The number of cited patents, which indicates the degree of technological utilization, has been increasing by 184.7% a year since 2011. As a result, the number of cited patents increased about 10 times from 19 in 2011 to 154 in 2013. Tesla’s increasing number of cited patents is closely correlated with the rise in its stock price which rose about 10 fold from $25 in 2011 to $250 in 2014.
Tesla’s core patent is the thermal management system necessary for ensuring battery safety.
When the Tesla patent portfolio is analyzed, about 70% (more than 111 out of 160 patents) concerns technologies related to batteries. In particular, when it comes to overheating, which is essential for securing battery safety, Tesla has built an unrivaled portfolio in terms of the number of registered patents (44) and quality. This portfolio has enabled Tesla to design and build its mid-to-large size Model S luxury sedan.