Tesla Motors Inc.'s Decision Could Lure a Partner and Solve a Looming Problem

There are many potential implications of Tesla Motors' decision to release its patents. Here's one very positive effect it could have on Tesla's Supercharger network.

Jun 16, 2014 at 2:44PM

Model S Photo Gallery
Tesla Motors' Model S charging. Source: Tesla Motors

Tesla Motors Inc.'s (NASDAQ:TSLA) stock market gains have been nothing short of impressive, though the young electric-car maker faces many hurdles in its quest for mainstream adoption of electric vehicles. One factor holding the company back is the lack of charging infrastructure, which would enable electric vehicle drivers to make long distance trips with ease. Thus far, it's been a challenge that Tesla has been tackling on its own. After Tesla's recent announcement about releasing its patents, it may not be facing the problem single-handedly for much longer.

Driving solo
Even on its own, Tesla is set to make a substantial increase in the number of charging stations in America, and sooner rather than later. In the images below, compare the number of Tesla's Supercharger stations currently to the amount it plans have operating in 2015.

Supercharger stations available in the U.S. Source: Tesla Motors.

Supercharger stations planned to be open in 2015. Source: Tesla Motors.

Tesla has previously mentioned that it is very open to allowing competing automakers' electric vehicles to use Tesla's Supercharger stations. Consider that now three automakers -- Tesla, BMW, and Nissan -- together produce roughly 80% of electric vehicles and each uses different charger applications.

By allowing other automakers' electric vehicles to use its Supercharger stations, the company can help avoid a problematic scenario where individual automakers have their own unique charging stations. Imagine if different automakers could only fuel up at specific gas stations -- what a headache that would be!

In addition to avoiding that scenario, if an alliance of sorts were to develop it could significantly accelerate the progress of Tesla's infrastructure build-out by splitting the cost between multiple automakers. A partnership would likely lead to more Supercharger stations, built at a faster pace. That would in turn lead to faster mainstream adoption of electric vehicles and provide a significant boost to Tesla's stock.

Unfortunately, a partnership has failed to materialize thus far. But Tesla's recent announcement could change that.

Patents set free
Thus far the biggest hurdle to finding automakers able to share the burden of building out the Supercharger infrastructure has been that no other type of electric vehicle can take a charge near 135kw, which is the power level of Tesla's Supercharger stations. 

As the dust settles from Tesla's decision to release its patents to the world, BMW and Nissan are already rumored to be interested in collaborating with Tesla on charging technology. These talks could lead to an alliance that would give Tesla a partner, or two, in the task of expanding its Supercharger network enough to power a mainstream driving audience.

Also, Tesla could also ask companies to share some of their patent information with it in exchange. Though it's unclear what benefit that could have for Tesla, as a potential investor, I would be very confident in CEO Elon Musk's ability to find and use strategic competing patents to significant advantage.

Early innings
It's still very early in the grand scheme of Tesla's goal to change the way Americans "fuel" up. Tesla has 97 Supercharger stations in North America, 14 in Europe, and a couple in China. Releasing its patents and potentially luring a partner to help expand its network at a fraction of the cost, and at a faster pace, would be a positive catalyst for its stock price and long-term goals -- and this article is only covering one potential implication of the patent release decision.

Make no mistake, as far as long-term plans go, Tesla's ambition to change the way the world drives is on the right track. The ball is clearly rolling, and it may just be a matter of time before EVs are adopted widely. The recent release of Tesla's patents may be just what the company needs to put that ambition in the fast lane. 

Warren Buffett's worst auto nightmare (Hint: It's not Tesla)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this mega trend. Click here to access our exclusive report on this stock.

Daniel Miller has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers