I wonder how concerned they are about leaking proprietary technology from Chinese employees. Apple constantly struggles with this since the employees are paid little, but the incentive to leak and "share" information is very lucrative.
This might not answer your point fully but in the article:
> China had previously circulated a proposal that would allow electric-car makers into the country without local partners if they were to locate in the so-called free-trade zones. The government set up the country’s first such zone in Shanghai in 2013, and has since approved 10 more around the country.
> Until now, foreign auto makers have built cars in China through joint ventures with local manufacturers. That allows them to avoid the 25% tariff on autos, but also forces them to split profits, and potentially share technology, with the local partner—something that has tripped up Tesla’s previous efforts to expand there.
My reading of this is, Tesla is okay with the tariff sanctions but doesn't want to share tech or profits with local partners. While that doesn't completely remove the potential IP problem, it does mitigate to a certain degree.
So by paying a 25% tariff, developing in china outside "free-trade" zones none of tesla technical manufacturing/design knowledge will be leaked to the government and knockoff competitors?
Good luck w/that.
One can only assume tesla expects some level of compromised proprietary secrets. Calculated risk on some level. Maye they see this as speeding up the inevitable.
Apparently they figure this risk is outweighed by the benefit of employing a manufacturing powerhouse which surpasses their US productions.
On a more positive note, this is largely how the 3rd-party repair industry for Apple's and other's electronic products (laptops, TVs, etc.) is fed --- leaked schematics and other documentation is very useful not just for cloning but for repair.
I thought Tesla (unlike SpaceX, due to ITAR/etc.) was pretty open with their technology. I assume Elon would be happy if all of the non-EVs in China copied Tesla. OTOH, I think the Chinese market actually already has better EVs for 90% of the Chinese market, and the market for Tesla is the high-end prestige market which wouldn't be so affected by copying (they don't copy BMWs today)
I believe this only applies to charging tech so that the whole industry is standardized for charging stations. I don't think Tesla shares any of their chemistry, power management, and other high value IP.
> Tesla CEO Elon Musk announced today that his company will not "initiate patent lawsuits against anyone who, in good faith, wants to use our technology."
The question really is - what defines "good faith" for Musk and Tesla.
Additionally, I am no patent expert but it will be interesting to see licensing terms, if any. Specially after what happened with React and Facebook.
The link in another response to me has a link to a clarification video from Musk. I didn't watch it, as the text was adequate. It looks like no licensing is required and that they've been legally dumped into the public domain in a binding fashion - maybe. That's not actually ever been ruled on in a court, from what I can find via Google.
That post suggests no company legal team would allow it. The article thinks Apple might use it, as an example of a user.
I would like to take a moment to recognize that Tesla is apparently run by 90's meme lords. Check the url on that link. all-our-patent-are-belong-to-you. This pleases me greatly.
Even if they were well compensated the Chinese govt is very good at convincing people to leak or share IP with promises of huge cash rewards or career opportunities within national companies.
I'd imagine Musk would be wary of this and put the proper controls in place.
Usually they dont even have to convince anyone, the only way to build a factory in China used to be a joint venture owned by Chinese partner.
Here Tesla is willing to pay '25 percent tariffs' to avoid that, but I highly doubt it will do them any good when it comes to Cherry Model Q/Geely Electric showing up in 12-18 months build using parts interchangeable with Model 3.
Have there been any instances of a Chinese firm copying anything as large as a car part-for-part? I understand they make cars that look like Western cars, but under the hood they are completely different. I wouldn’t be at all surprised if they came out with the Model S ‘Petrol Edition’.
I knew an engineer who used to work for a US company that made nuclear reactors. He had said that they sold a single reactor to someone in China, and only one. Several years later they found that they had made many identical copies of that model reactor, down to the size of the bolts.
A lot of the parts in every car, produced anywhere in the world, are shared with other models from other manufacturers. That's perfectly normal. Like e.g. "german", "french" or "american" cars, many "chinese" cars are made up mostly of german, french etc. parts. Well, german-engineered, french-engineered etc., beccause the parts are often produced relatively closely to the manufacturer's assembly plant. (Which is why BMW and it's american suppliers are biggest exporter of the fruits of automotive labor in the US.)
Chinese manufacturers are just more blatant in their copying of western designs. Western manufacturers tend to be way subtle about taking and reworking design cues. Though undeniably everyone will assimilate any popular design into their own design language.
I honestly don't think it will matter. Brand vanity goes a long way in China, and I bet Tesla will reliably command a premium over chinese knockoffs. Plus, the EV market in China is going to be so enormous that Tesla can take just a small piece of it and still be outrageously successful.
>Even if they were well compensated the Chinese govt is very good at convincing people to leak or share IP with promises of huge cash rewards or career opportunities within national companies.
None of the "magic smoke" in those chips is made in China. The "secret sauce" is all done in the US, in Oregon and Arizona. The US turns raw silicon into wafers full of chips. The plants in China, as far as I personally understand, are doing the work of cutting the wafers up, and connecting to mini-PCB boards. They are doing the labor-intensive part of the production, and nothing of the understanding-intensive part of engineering.
Chengdu doesn't have a fab and is hardly in the middle of nowhere. Normal logistic costs.
Dalian is in a highly industrialized liaoning province, again highly populated and lots of resources. Again, normal logistic costs.
If they put it in the middle of gansu or qinghai or maybe Northern Yunnan or southern Sichuan (pretty much the Tibetan plateau), that would be the middle of nowhere.
As far as I know (which is admittedly very little), Intel's fabs require massive amounts of stable electricity and clean water. Maybe proximity to such resources is their driver in this case.
Wait... Back up. That was not my intention at all. The question was more about cultural differences and risks moving a core piece of a public company with lots of proprietary technology into a foreign country. I am actually a bit frustrated and confused why you think my comment would be deserving of a moderator.
If you'd even done a cursory study of foreign firms in China having their technology stolen, you'd realise it's a real problem that many foreign firms face and concerns about it aren't due to racism but an abundance of cases where it has happened.
