A Strategy of Siege? Tesla Plans to Provide Software, Power System, and Batteries for Competitors

published: 2020-08-03 18:30 | editor: | category: News

Electric vehicle manufacturer Tesla is evidently the bellwether. While various major automotive manufacturers rapidly catch up on key technology, Tesla CEO Elon Musk boasted that Tesla will be authorizing its software, and providing its power system and batteries for automotive makers who produce electric vehicles, by looking at the bigger picture, which may contain ulterior motives.

Tesla has been far ahead in the market of electric vehicles, especially in the field of software, where Herbert Diess, Chairman of German automotive manufacturer Volkswagen, also admitted that the company is currently implementing the so-called “Tesla Catch-up Program” to reduce the software gap between Tesla. Now, Musk has stated that Tesla will be happy to lend a helping hand, tweeting: “Tesla will be authorizing its software, and providing its power system and batteries, in the hope of not crushing its competitors, but rather attempting to accelerate the development on sustainable energy”. Tesla will also authorize its advanced driver-assistance system, Autopilot, at the same time.

Musk had announced back in 2014 that Tesla was opening its patents in order to facilitate a faster development in electric vehicles for other automotive manufacturers, though such announcement was merely a declaration, which indicates no substantial meaning, and thus not many companies are actually using the patented technology of Tesla.

The only company that has publicly admitted to using the patented technology of Tesla is Chinese automotive manufacturer Xpeng, who was eventually sued by Tesla, not for using the latter’s patented technology, but for allegedly stealing the source code of Autopilot.

Tesla had provided its power system and batteries for Daimler and Toyota, who were both shareholders of Tesla, before terminating in cooperation during 2015. Musk commented when Tesla stopped providing power systems and batteries for Daimler and Toyota that the company must first fulfill its own electric vehicles due to the restriction on battery provision.

Electrek believes that Tesla will first fulfill its own demand, whether it is for the present, or the foreseeable future, and also commented that, “most automotive manufacturers wish to develop their own professional knowledge whilst becoming the new blood in the automotive industry”.

As for the cooperation model for software authorization, the coverage of Electrek pointed out that transactions in software authorization do exist in the existing automotive industry, for instance the transaction between Polestar and Google Android, though it is uncertain if Tesla adheres to a similar pattern. The authorization for the battery management software, advanced driver-assistance system software, and over-the-air software within a vehicle would still require clarification.

It is yet unknown which type of battery Tesla will be providing. The company currently has a joint venture of battery with Panasonic, and has purchased batteries from China-based CATL and South Korean Manufacturer LG Chem. Tesla is also planning for its “Roadrunner” program, which consists of an autonomous battery plant at the Fremont factory in California.

Musk commented during a recent conference call that the real restriction for the growth of Tesla lies on a rational price for battery production, and stated that the company will continue on expanding the businesses with Panasonic, CATL, and LG Chem.

Battery is the most important and expensive component of an electric vehicle, which is a competitive advantage for Tesla. During an interview between Reuters and Park Chul-wan, battery expert and professor at Seoul University, the latter commented, “Tesla’s provision of battery may reduce the entry barrier for electric vehicle manufacturers, and impose potential threats for traditional automotive manufacturers who have their own platforms, where the success of the strategy will increase the dependency of the electric vehicle market on Tesla.”

 (Cover photo source: Tesla)

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