This article estimates a dynamic, structural model of entry and investment for the plug-in hybrid and electric vehicle (PHEV) industry in the US. In June 2014, Tesla, a leading manufacturer of electric vehicles, announced it would make its software and hardware available for free to other automakers. That could lower the innovation costs and partially remove the entry barriers. More PHEV producers would induce economies of scale, leading to decreased manufacturing costs. However, underinvestment of Tesla's rivals may occur due to free riding, resulting in slower quality improvements in the industry. My results show that Tesla's initiative was beneficial for the industry and Tesla. I find a 60% drop in investment cost, and a decrease of 100 million in entry cost into the PHEV industry. Counterfactual analysis shows that, had Tesla not provided open source, the industry would have had 33% fewer PHEVs and Tesla would have had one billion less in profit.