FROM PRESTON TUCKER TO MUSK’S TESLA: BUMPY ROAD OF INNOVATION IN AUTOMOTIVE INDUSTRY

With the invention of internal combustion engine,  the early 20th century witnessed the birth of a new industry: the automotive industry

By its very nature,  the industry is tech intensive and series of  technological innovations  and designs litter the evolutionary path from Ford’s Model T to Elon Musk’s Tesla.

Even if the basic principle of the automobile has not changed, the car has changed in many ways. What our great grandfathers drove, if they were lucky and what our teenagers lust for, are two very distinct products indeed.

This author will consider the period between two world wars to be the golden age of automobiles where, often boutique constructors and carrossiers strived to combine modern technology of the era with design and grace. Except for automobile enthusiasts few people will remember the ever gorgeous Delahayes, Talbot-Lagos and Dusenbergs. Yet, some of the other early pioneers of the automotive industry have survived to become household names such as Ford, Mercedes, Peugeot and several others.

Even if the basic principle of the automobile has not changed, the car has changed in many ways. What our great grandfathers drove, if they were lucky and what our teenagers lust for, are two very distinct products indeed.

One major principle of the automobile, its engine, while  substantially improved from the early days is still based on the same principle: internal combustion. Internal combustion engines are not efficient and certainly not environment friendly. Most of the energy they produce is lost as heat. But they were the best alternative we had for a long time. There were some innovations like Wankel rotary engine and a lot of R&D in alternative means from electricity, to bio fuel that have been tried but with no major success.

In the last two decades we started to notice the seeds of arguably the two major disruptions in the automotive industry: electric vehicles and autonomous cars. And new words, such as mobility, connected cars have entered our lingo.

Let us also remember the causal connection of evolving automotive industry with other innovations and activities with economic impact such as gas stations, roads on which they travel, and associated supply chains.  The same causal link can now be found in charging stations, apps, and IoT in general. Thus, there is a shift in supply chain, OEM and infrastructural innovation models in anticipation of the revolution.

In the last two decades we started to notice the seeds of arguably the two major disruptions in the automotive industry: electric vehicles and autonomous cars.

New words, such as mobility, connected cars have entered our lingo.

Since the 1970’s, there has been a search to free the industry from its dependency on fossil fuels1. Thus, electric cars are not a new development, there have been commercially available models as early as 1991 with GM’s EV1, that could travel about  120 KMs with a single charge. Probably the first relative commercial success was Toyota Prius. Prius, launched in 1997 is a hybrid and Prius’ and similar car’s appeal has been more to environmentally conscious consumers. For most, these cars were viewed as slow, low performing, expensive toys for tree huggers (or Uber drivers). Elon Musk’s Tesla changed the perception of electric powered cars. Why not have an electric powered supercar or a luxury sedan. Why not indeed? Arguably Elon Musk’s Tesla was crucial in electric motor powered cars  going main stream and to be seriously considered as a viable alternative to gasoline powered market leaders.

Tesla was also the leader of the pack when it came to  autonomous cars. What was a possible but closer to science fiction ten years ago is now an option to be purchased. While we are still bit far from completely autonomous car, Tesla is not the only one pushing in this field. From more convectional brands (Volvo) to less conventional ones, like Google, the technology is advancing.

One of the main arguments of this article is that automotive industry,  as most other established sectors, while innovative in order to stay competitive,  is not open to disruption.  New business models, radical new technologies (even coming from insider large players, like rotary motor- Mazda RX series anyone?)  and new builders find it difficult to stick around. This is mainly due to the high capital costs  associated with the industry and partly due to big players being somewhat content with the status quo of their market shares.

Today, experts in the field predict a drastic change, if not disruption in such scale that most of the car brands we know may no longer be in existence in the somewhat near future, replaced by others that we previously have been familiar solely on computer screens.

One prediction is that major manufacturers of today will shift their business model to IP holding and licensing companies, providing technology to new comers who will be building the cars we drive (or cars that drive us) in the near future.

Back to rock star of innovation, Musk. It is impressive for Tesla to have come up with a complete new car, new technology, new sales strategies and, for a while at least, it looked like Tesla will make it stick. This might be, to some extent, due to Elon Musk’s high rock n’ roll profile.

To most, Elon Musk is a guy who likes to rock the boat. Innovator in many fields and a success story, . Yet, some dark clouds started gather around Musk’s Tesla project. The company’s stock has plummeted. Tesla was unable to deliver its new Model 3, one if its cars was recently involved in a fatal crash, possibly while in auto drive mode and the company had to recall about 120.000 cars regarding a steering problem. Perhaps Tesla does not have the girth to withstand such negative publicity as do most of its older and bigger brothers from Detroit.

If history has a tendency to repeat itself, conventional wisdom will suggest that Tesla may not survive. Elon Musk was not the only one who tried to change the industry. Who recalls Preston Tucker? How about, John Z. DeLorean (remember the car from “Back to the Future”?)

Both DeLorean and Tucker were extremely innovative cars for their era. Tucker probably more so than somewhat more famous DeLorean. Neither of the companies survived and both cars are now collector items. Good luck snatching up a Tucker with only 51 cars produced in 1948.

So these cars were not a commercial success. That much is evident. But, how about the innovations that characterized their products? Did they fall in the same dark well to be forgotten?

Let us recap what were the key innovations of both Tucker and DeLorean:

TUCKER 48

  • A perimeter frame and roll bar
  • Directional headlights
  • Collapsible steering column
  • Seat belts
  • Magnesium Wheels
  • Disc brakes
  • Continuous Variable transmission
  • Independent suspension

DELOREAN

  • Fiberglass underbody
  • Stainless steel body
  • Gullwing frame
  • Elastic Reservoir Molding*
  • Wankel Rotary engine*
(*) Planned but not on the production vehicle

IP RADAR: Geographic Territory Map

Tucker and DeLorean one of the best cars in their time. Tech Radar analyzed 47 patent records to understand the landscape at their time.

The geographic breakdown shows the percentage breakdown of the patents in the technology field across different jurisdictions.

This analysis is helpful for understanding the territorial markets the technology field is prominent and commercialized in.

The point is, innovators build on the innovations of their predecessors. As consumers we are often unaware that technologies that we use daily and take for granted can be traced to years, often decades back. More interesting is that it so happens that companies that make the technology commercially available are not always the pioneers who innovated them.

Whether Tesla’s vertically integrated production strategy and its product will survive remains to be seen. On the other hand Tesla makes its patents available to address supply chain problems regarding electric propulsion, which is a smart move and certainly allows for the diffusion of the technology and will path the way to other critical innovations on battery life, performance, weight etc.

Thus, our vision is:  innovation is the soul of great companies, even if the company dies and is forgotten in history (like Tucker 48), the vision embedded in the innovation lives on through embodied in the products of others. One way to insure that innovation does not disappear in history is to capture it by ways of effective use of intellectual property system. Like Tesla is doing making its patents available.

Innovators build on the innovations of their predecessors.

Innovation is the soul of great companies, even if the company dies and is forgotten in history, the vision embedded in the innovation lives on through embodied in the products of others.

We are at the brink of a major revolution in automotive industry, cars as we know them will change and companies who have until now dominated the market will have to evolve. As Darwin suggests, those who will be the most flexible to adapt to change will survive. One big expected change will be in the business model, shifting towards IP maximization based strategies. With cars getting connected, it is not far-fetched to assume new standards and patent pools to be more prominent created. There will also be innovations in infrastructure, regulations and insurance business. Good technology matched with good strategy does have a positive domino effect fueling innovation.

Technology Focus

The graph shows the top inventors in the technology field.

Helpful for: determining the key inventors that have contributed to the generation of most patents. This information can be useful if one is looking to evaluate the work of top performers in a specific technology field and recruit inventors for their own organization.

The graph visualizes the top 10 technology areas the patents within the technology field fall into, with the size of the box corresponding to the number of patents. This analysis is useful for understanding the different technologies that the searched technology field can be applied to and the potential applications.

Most cited Patents & Landscape Analysis

The graph shows the top 10 patents that have been cited most frequently by other patents.

Helpful for: identifying which patents in the portfolio are more prolific and have had their technology built upon by others. These patents are likely to be more influential and tend to represent the core, innovative technology of the organization it represents

The landscape is a 3D representation of the patents in a technology space. The factors analyzed are verbal similarity and IPC commonality.

Helpful for: Providing valuable information on the technology landscape in a visual representation. Peaks indicate densely populated areas of patent development, while low-lying areas represent untapped areas for potential growth and expansion into new territories.

Innovators build on the innovations of their predecessors. As consumers we are often unaware that technologies that we use daily and take for granted can be traced to years, often decades back.

TLS.IP  is focused on  IP and innovation portfolio management, transactional & legal advisory services including litigation support as well as IP valuation for IP based transactions. 

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