Elon Musk's bigger picture

Tesla has been in the news quite often lately because of its self driving technology. Of course there would be stumbling blocks to overcome but Tesla is by far one of the most innovative car companies that emerged in the last 20 years. Tesla's owner Mr. Elon Musk is undoubtedly a visionary and innovator in all fields of business he has entered. Many industry  observers were very surprised when Elon Musk decided to open the patent for Tesla electric motor and battery for other car companies to use. Under normal circumstances that would spell disaster since no car company would want a competitor to learn exactly what you know and get a hold of your technological knowledge. Mr Elon Musk is no ordinary car company owner. He happens to be the same person who owns the Gigafactory, soon to be the world's largest battery factory which will supply approximately 70% of the world's battery demand. The gigafactory will also be able to manufacture batteries cheaper than any other factory in the world because of sheer volume. This would also mean that car companies are likely to buy their batteries from Gigafactory. It is a brilliant strategy to open the patent for Tesla to others and later profit from the sale of batteries.

The sale of the batteries will out strip the profit Tesla can make from just selling cars. The mass production of batteries will be so incredibly profitable for Elon Musk since he is not only making batteries for cars but also for home solar energy systems via its Powerbox and also for other solar farms. The business potential is almost limitless and this is a the bigger picture that Elon Musk sees. No other car company in the world is able to boast such claims about having their batteries made in-house. All car companies right now buy their batteries from a battery manufacturer either in Japan, China, Korea or Taiwan. Tesla will be the only car company in the world with the battery sourced from their sister company owned by the same owner.

Drawing profit from gigafactory's sale of batteries to other car companies it is like the other car companies subsidising the production cost of Tesla cars. It will be hard for car companies to resist buying batteries from Gigafactory when the cost of the battery will be lower than any other factory in the world. Great business strategy by Mr. Elon Musk!