• News
• Comment(187)
• 2024-12-14

Unmasking the "Savior" of China's Electric Vehicles

Today, China's new energy vehicle (NEV) industry stands at the forefront of global innovation, yet there are still voices that remain entrenched in outdated narratives from 2014. Among the most common refrains is the belief that "Tesla's open patent model is the genesis of China's NEV industry." To these individuals, the accomplishments of Chinese manufacturers are often attributed solely to Tesla's generosity in sharing its technology. They contend that without Tesla’s altruistic gesture, domestic electric vehicles would have taken decades to even approach their current state.

This fixation not only undermines the accomplishments of homegrown enterprises but also reveals a troubling sense of superiority rooted in a misguided assumption of genius among the few reveling in Tesla's pioneering status. For many, it seems they believe that all of China’s innovations in this space are mere echoes of Tesla’s original symphonies, reflecting a deep-seated lack of confidence in Chinese capabilities in innovation.

While it is indisputably true that Tesla has pioneered significant advancements in the realms of electric vehicles and intelligent automotive ecosystems, the narrative that all innovation flows from its patents and designs is grossly overstated. A deeper investigation into the specifics of what Tesla has shared and its implications is often met with silence from those who fervently espouse this view, echoing the sentiments of a bygone era rather than grappling with the complexities of present realities.

Advertisement

The public discourse around patents erupted dramatically when, on June 12, 2014, Tesla formally announced an initiative to open all its patents to the public in an article titled "All Our Patents Are Belong To You." In this piece, Elon Musk characterized the move as a commitment to environmental sustainability and a catalyst for the growth of the NEV industry.

But why the sudden magnanimity? To untangle this question, one must return to the economic context of 2014 when Tesla was grappling with disappointing sales and financial losses. Although annual revenue reached $3.2 billion—an impressive 58.8% increase year on year—the company reported a staggering loss of $294 million, a grim sight for demanding investors. The much-anticipated Model S had fallen short of its sales targets by significant margins, leaving Musk with the dual challenge of justifying the company's performance to investors while crafting a compelling narrative to entice consumers willing to pay a premium for its vehicles.

What arose from Musk's dilemma was a masterful pivot: by reframing Tesla's challenges as a story of altruistic leadership within the industry, he successfully crafted a narrative that continues to be glorified and regurgitated by enthusiasts today. Nevertheless, this tale holds more the flavor of a strategic maneuver than genuine generosity—most of Tesla’s patents were already public knowledge before this proclamation, and while they graciously chose not to pursue traders utilizing these patents, they still maintained the upper hand with their intellectual property portfolio.

In reality, this tactic may not have been as selfless as it appeared. Rather, it strategically positioned Tesla as a benevolent forebear in a burgeoning market. Interestingly, Tesla's late entry into the patent game and its meager patent portfolio reveal the company's limitations—271 patents announced in June 2014 include only a small fraction that were proprietary to the Chinese market. Musk's claim that "patents are for the weak" begins to make sense when one considers that there are significantly fewer patents claimed in a market like China's, where local firms like BYD have been aggressively innovating.

Moreover, if we consider that the patent protection system is regionally limited, and if both BYD and Tesla filed patents for similar technologies in their respective countries, then the disparity in patent numbers speaks less to technological inferiority on Tesla's part and more to the Chinese companies' advancements in the same technological space. Reports from reputable research entities highlight that many of Tesla’s touted inventions have been eclipsed in innovation by homegrown rivals. For example, a report from 2022 ranked Tesla nearly 200 spots lower than Baidu in terms of autonomous driving patents—an astonishing revelation for a company that has long portrayed itself as the market leader.

When analyzing Tesla's supposed selflessness, it's important to dissect its announcement, which contains a pivotal phrase: "as long as the party using Tesla's patents acts in good faith, Tesla will not sue any party that infringes on its patents related to electric vehicles or related equipment." This seemingly generous offer involves a rather subjective definition of "good faith." It means that if a company utilizes Tesla's patents, the expectation is that it will refrain from any legal recourse should Tesla turn around and utilize any inventions of theirs—effectively placing a shield over Tesla while potentially ensnaring local manufacturers in an inequitable exchange of intellectual rights.

This looming threat is exacerbated by the fact that Tesla's patent-sharing initiative conveniently benefits Tesla immensely, allowing it to tap into the innovations of various enterprises without the same level of reciprocity. Notably, Tesla has a history of quietly acquiring patents through strategic channels to fortify its market position. Between 2010 and 2012 alone, it transferred 135 patents in exchange for substantial government loans, indicating that its expropriation of technology often happens behind a façade of goodwill.

Inside the narrative of China's electric vehicle industry lies the powerful recognition of its own trajectory—one that is not dependent solely on a foreign entity. The bizarre idolization of Tesla overlooks a pivotal truth: the NEV industry in China has been in the works far longer than many would like to admit. The sector has cultivated innovations over nearly two decades, and 2014 simply marked a moment of explosion aided not just by Tesla's actions but by domestic policies that began to hugely empower the industry through supportive regulations and incentive structures.

In fact, Tesla's public unveiling of its patents coincided perfectly with a groundswell of interest in NEVs, a shift initiated by domestic policies promoting electric vehicles. This timing has led many to mistakenly associate Tesla’s announcement with the inception of a booming sector. However, as Ouyang Minggao, a respected academic, has pointedly critiqued, those who claim that China’s adoption of electric vehicles owes its success to Tesla are failing to appreciate the depth and breadth of Chinese innovation. The argument that suggests Tesla's opening of patents was the inciting factor for the birth of companies like NIO or Xpeng lacks substantial grounding. Instead, it reflects an underlying insecurity about China's own technological potential.

Tesla, while undoubtedly a revolutionary force in the automotive industry, does not command the entire narrative of innovation in electric vehicle technology—this story is enriched by a tapestry of multiple voices, here in China as well as globally. Chinese car manufacturers have amassed their own considerable technologies and expertise in their own right, navigating through challenges that are unique to their contexts. This ongoing evolution of the industry showcases a competitive spirit and resilience among Chinese manufacturers that deserves to be respected.

While we ought to pay homage to the achievements of Elon Musk and Tesla, it is imperative to recognize that the narrative does not necessitate kneeling before them. Instead, it calls for a celebration of the local brilliance and the tenacity of Chinese enterprises that have boldly charted their own paths in the realm of new energy vehicles, crafting their own identities amid the noise of established giants.