Stake logo


Age of the automobile

There are currently over 1.45b cars on Earth. Imagine if you received royalties for each and every one of them. Well, at one point, that was the reality for one man.

Back in 1895, the patent for automobile technology belonged to a single person: George Selden. Instead of manufacturing cars, George demanded royalties for the right to produce them in the U.S. The Selden Patent forced all automobile manufacturers across the U.S. to seek his approval and pay him a fee for every car made.

The Electric Vehicle Company (EVC) was the very first to pay, forking out US$15 (US$483 in 2021) per car. If this royalty existed today, the 162m new cars sold in the U.S. between 2012 and 2021 would have cost an extra US$79b.

Following EVC’s acquiescence, George partnered with William Whitney to create the Association of Licensed Automobile Manufacturers (ALAM) in 1903. ALAM quickly brought the industry to heel, and names like Studebaker, Oldsmobile and Cadillac (NYSE: GM) joined the association. Membership required an initial licence fee of US$10,000 (US$307,921 in 2021) and a royalty on every car produced. 

The association believed the market should focus on the rich with limited production, subsequently denying almost all upstart applications.

Along came Henry Ford, in his now iconic Model T that was cheap and ready to democratise car ownership. That didn’t sound good to the rich folk at the ALAM, who denied Ford’s application and even ended up suing his company, Ford Motor (NYSE: F), and winning in 1909. 

But by then the Model T was a runaway success. Ford took the case higher and won, properly launching the age of automobiles. If the ALAM had won, the masses would have never had the chance to adopt the car. So the next time you go for a drive, honk if you’re grateful to Mr Ford.


Want more?

You know what to do

Insights, trends and company deep dives delivered straight to your inbox.

Stake logo
Over 7,000 5-star reviews
App Store logoGoogle Play logo

Subscribe to our free newsletters

By subscribing, you agree to our Privacy Policy.

Stakeshop Pty Ltd, trading as Stake, ACN 610105505, is an authorised representative (Authorised Representative No. 1241398) of Sanlam Private Wealth Pty Ltd (Australian Financial Services Licence No. 337927) ('Sanlam') and an authorised representative (Authorised Representative No. 1241398) of Airwallex Pty Ltd (Australian Financial Services Licence No. 487221) ('Airwallex'). Stake is not authorised by Airwallex under Airwallex’s AFSL to arrange for clients to be issued with securities as Airwallex is not authorised under its AFSL for this purpose. Stake is not authorised by Sanlam under Sanlam’s AFSL to arrange for clients to be issued with a non-cash payment facility as Sanlam is not authorised under its AFSL for this purpose. Stake SMSF Pty Ltd (‘Stake Super’) is not licensed to provide financial product advice under the Corporations Act. This specifically applies to any financial products which are established if you instruct Stake Super to set up a self managed super fund (‘SMSF’). When you sign up to Stake Super, you are contracting with Stake SMSF Pty Ltd who will assist in the establishment of a SMSF under a ‘no advice model’. You will also be referred to Stakeshop Pty Ltd to enable your trading account and bank account to be set up in order to use the Stake Website and/or App. Stakeshop Pty Ltd will also run marketing and promotions to you under. For more information about SMSFs, see our SMSF Risks page.The information on our website or our mobile application is not intended to be an inducement, offer or solicitation to anyone in any jurisdiction in which Stake is not regulated or able to market its services. At Stake and Stake Super, we’re focused on giving you a better investing experience but we don’t take into account your personal objectives, circumstances or financial needs. Any advice given by Stake is of a general nature only. As investments carry risk, before making any investment decision, please consider if it’s right for you and seek appropriate taxation and legal advice. Please view our Financial Services GuideTerms & ConditionsPrivacy Policy and Disclaimers  before deciding to invest on or use Stake or Stake Super. By using our website or service in any way, you agree to our Privacy Policy and Terms & Conditions. All financial products involve risk and you should ensure you understand the risks involved as certain financial products may not be suitable to everyone. Past performance of any product described on this website is not a reliable indication of future performance. Stake and Stake Super are registered trademarks in Australia.

Copyright © 2024 Stake. All rights reserved.