TeslaвЂ™s CEO, Elon Musk, stated in 2014 that вЂњTesla will not initiate patent lawsuits against anyone who, in good faith, wants to use technologyвЂќ.

In fact, Tesla itself tacitly acknowledges that its first-mover status does not translate to an intellectual-property advantage. General Motors has also achieved autonomous capability through its purchase last year of Cruise Automation, a startup in the field. is best positioned to advance self-driving functionality, and it has done exactly that through its Waymo subsidiary, whose cars have self-driven more than 4 million miles on American roads. With a Manhattan ProjectвЂ™s worth of intellectual-property in artificial intelligence, Alphabet Inc. Several others in the automotive and tech industries have functioning self-driving technology. TeslaвЂ™s autonomous driving features also offer no enduring competitive moat. In fact, Tesla itself expects battery cells to be commoditized over time and has designed its battery packs to flexibly accommodate different cell chemistries and form factors, so that it may choose from an array of third-party vendors in the future. The same Panasonic has recently signed an agreement with Toyota for the establishment of a joint automotive battery business. TeslaвЂ™s primary partner in the production of lithium-ion battery cells is Panasonic, with whom Tesla has a long-term supply contract. However despite its stratospheric valuation, a closer look under the hood reveals no lasting competitive differentiation at Tesla. Trading at over 30x forward ebitda, Tesla is significantly more expensive than traditional automotive metal-benders such as GM and Ford, which are trading closer to 3.5x ebitda. So how much of an advantage does TeslaвЂ™s head start confer? TeslaвЂ™s stock is certainly implying that it does a great deal. As the David-esque insurgent in the automotive industry, Tesla has beaten the odds to develop the highly-rated Model S, and is now looking to leverage that success into a broader portfolio of automotive and battery products. When it comes to electric cars, Tesla is the clear first-mover. Or where there is intellectual property to be developed and patented, as with drug discovery. This is particularly true when there are significant network effects, such as with Facebook and social media. Moving first in business, as in chess, can make or break a company. The first-mover advantage is a foundation stone of management science. And on November 17, 2017, the CEO of Volkswagen stated that he was вЂњlaying the foundation for making Volkswagen the worldвЂ™s number one player in electric mobility by 2025вЂќ. On October 2, 2017, General Motors declared that it вЂњbelieves in an all-electric futureвЂќ, and that it will launch at least 20 all-electric vehicles by 2023. announced on December 18, 2017, that it will release more than 10 battery powered cars by 2020, and that by 2025 every model in its line-up will be available as a fully or hybrid electric variant.

First mover