A Civil War Is Brewing In The Race To Replace Gasoline-Powered Cars
Among other things, he said a company's relying on patents for revenue is a sign of weakness, and he slammed the state of patent controls in America.
Hidden among the patents announcement was Musk's comments on automakers' use of fuel cells, which use the reaction from combining hydrogen with oxygen to generate electricity.
"I don't think fuel cells are a viable path," he said. "Even the best theoretical fuel cell doesn't compete with batteries. It doesn't seem like the right move."
This is a weighty statement to make. Confronted with rising costs and flagging sales, major automakers have been ramping up fuel cell production while winding down their battery-powered vehicles. Chrysler-Fiat CEO Sergio Marchionne recently implored an audience not to buy any more of the firm's battery-powered 500e car because the company loses too much money on them. Hyundai is expanding its fuel-cell fleet. And Toyota just rolled up its contract for Tesla components.
"Personally, I don't care what Elon, [Renault-Nissan CEO] Carlos [Ghosn], or [Volkswagen CEO] Jonathan [Browning] say about fuel cells," Toyota SVP Bob Carter reportedly said at the Automotive News World Congress in January. "If they want to 'plug in and tune out' other technologies, that's fine."
Indeed, on paper at least, Tesla is not the only EV holdout. Volkswagen plans to roll out an eGolf in the U.S. this fall. And Nissan is now testing its first commercial electric vehicle in Portland.
Meanwhile, Musk said Tesla had met with BMW about collaborating on EVs. BMW confirmed the meeting but declined to talk about what was discussed. BMW's i3 is, in principle, a rival to Tesla's Model S.
But both are considered luxury vehicles. And Musk's goal is to make all EVs, not simply Tesla's, cost competitive with regular gas guzzlers. With the patents announcement, he has now acted on his frustration that the market for them has not grown fast enough.
"He'd love to be the Microsoft Windows of a fast charging network," MLV & Co.'s Carter Driscoll told BI.
As Reuters' Ed Taylor points out, many major automakers long ago agreed on making a standardized EV connector on their cars. But the rollout of charging station networks has stalled. Tesla's connector does not conform to the Big 3 standard (although it's possible to buy an adapter), but its station network is now more robust. Taylor speculates that Tesla likely talked with BMW about nudging, for starters, Germany's EV market closer to Tesla technology.
Tesla's main goal is obviously to sell more vehicles. But Musk has stressed the environmental urgency of choosing what he sees as the right technology before its too late. "Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis," he said in his blog post announcing the move.
The key question is what consumers think. Right now markets for both are so small that it's difficult to find a reasonable gauge of sentiment. A report from Navigant research says that at current rates the two technologies combined will comprise less 2.5% of the market by 2035.
But the cost of lithium ion batteries is falling, and could fall even faster if and when Tesla's gigafactory, which aims to double the total amount of lithium ion batteries in the world, finally launches.
"With the cost of electrics dropping along with the cost of lithium-ion batteries, fuel-cells have a long road ahead to convince car buyers that the extended range is worth the distended price tag," the Chicago Tribune's Robert Duffer wrote recently.
The road may just become even longer.