Elon Musk announced Thursday that Tesla would open up its patents for fair use.

Among other things, he said a company's relying on patents for revenue is a sign of weakness, and he slammed the state of patent controls in America.

Hidden among the patents announcement was Musk's comments on automakers' use of fuel cells, which use the reaction from combining hydrogen with oxygen to generate electricity.

"I don't think fuel cells are a viable path," he said. "Even the best theoretical fuel cell doesn't compete with batteries. It doesn't seem like the right move."

This is a weighty statement to make. Confronted with rising costs and flagging sales, major automakers have been ramping up fuel cell production while winding down their battery-powered vehicles. Chrysler-Fiat CEO Sergio Marchionne recently implored an audience not to buy any more of the firm's battery-powered 500e car because the company loses too much money on them. Hyundai is expanding its fuel-cell fleet. And Toyota just rolled up its contract for Tesla components.



"Personally, I don't care what Elon, [Renault-Nissan CEO] Carlos [Ghosn], or [Volkswagen CEO] Jonathan [Browning] say about fuel cells," Toyota SVP Bob Carter reportedly said at the Automotive News World Congress in January. "If they want to 'plug in and tune out' other technologies, that's fine."

On paper at least, Tesla is not the only EV holdout. Volkswagen plans to roll out an eGolf in the U.S. this fall. And Nissan is now testing its first commercial electric vehicle in Portland. Meanwhile, Musk said Tesla had met with BMW about collaborating on EVs. BMW confirmed the meeting but declined to talk about what was discussed. BMW's i3 is, in principle, a rival to Tesla's Model S.

But the above examples are considered luxury vehicles. And Musk's goal is to make all EVs, not simply Tesla's, cost competitive with regular gas guzzlers. With the patents announcement, he has now acted on his frustration that the market for them has not grown fast enough.

"He’d love to be the Microsoft Windows of a fast charging network," MLV & Co.'s Carter Driscoll told BI.

As Reuters' Ed Taylor points out, many major automakers long ago agreed on making a standardized EV connector on their cars. But the rollout of charging station networks has stalled. Tesla's connector does not conform to the Big 3's standard (although it's possible to buy an adapter), but its station network is now more robust. Taylor speculates that Tesla likely talked with BMW about nudging, for starters, Germany's EV market closer to Tesla technology.



Tesla's first goal is to sell more vehicles. But in his patents announcement Musk also stressed the environmental urgency of choosing what he sees as the right technology before its too late. And he clearly does not see fuel cells as up to the task.

He's not alone. "Fuel-cells have a long road ahead to convince car buyers that the extended range is worth the distended price tag," the Chicago Tribune's Robert Duffer wrote recently. Duffer notes fuel-cell vehicles currently cost up to $100,000, and that Honda and GM have agreed to collaborate over the next seven years to try to bring down fuel cell costs.

Tesla, meanwhile, has been able to sit back and watch as the cost of lithium ion batteries has been continuously falling.





They could fall even faster if and when Tesla's gigafactory, which aims to double the total amount of lithium ion batteries in the world, finally launches.

Right now markets for both are so small that it's difficult to find a reasonable gauge of sentiment. A report from Navigant research says that at current rates the two technologies combined will comprise less 2.5% of the market by 2035.

But for Musk, the contest has a foregone conclusion.