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Pair accused of stealing battery manufacturing secrets from Tesla and starting their own company

Home> Vehicles> Car news

Updated 10:40 20 Mar 2024 GMTPublished 10:41 20 Mar 2024 GMT

Pair accused of stealing battery manufacturing secrets from Tesla and starting their own company

Federal prosecutors in New York say two men are charged with stealing Tesla technology and trying to sell it.

Prudence Wade

Prudence Wade

Two men have been accused of stealing technology and techniques from Tesla and trying to sell them on the open market.

New York prosecutors allege that the men, who live in Ningbo, China, got hold of proprietary information owned by Tesla about battery manufacturing technology.

Canadian citizen Klaus Pflugbeil was arrested on Long Island on Tuesday morning as part of a sting operation - he believed he was on his way to meet with businessmen to sell the information, but instead was greeted by law enforcement.

Smith Collection/Gado / Contributor / Getty
Smith Collection/Gado / Contributor / Getty

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His alleged co-conspirator, Yilong Shao, has not yet been arrested and is sought on the same charge - conspiracy to transmit trade secrets.

That charge can bring up to 10 years in prison if they're convicted, so this is a serious case.

Both men used to work for a company that developed technology to help with high-speed battery assembly lines, something that's a huge part of Tesla's supply chain, given its electric cars all rely on large batteries.

The Canadian company in question was bought by Tesla in 2019, making Elon Musk's company the sole owner of the technology, and it would seem the men allegedly sought to sneak it out and make a private profit from it.

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According to Breon Peace, US attorney for the Eastern District of New York: "The defendants set up a company in China, blatantly stole trade secrets from an American company that are important to manufacturing electric vehicles, and which cost many millions of dollars in research and development, and sold products developed with the stolen trade secrets."

PATRICK PLEUL / Contributor / Getty
PATRICK PLEUL / Contributor / Getty

It allegedly wasn't even a huge secret to be uncovered - Pflugbeil and Shao started their business in China but then expanded it to locations in Canada, Germany and Brazil, according to prosecutors. They marketed their technology directly as an alternative to Tesla's, authorities said.

That all sounds fairly brazen, and the case (which hasn't gone to trial yet) serves to underline how big the business of electric vehicles has become.

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With practically every car manufacturer now making electric cars alongside a fleet of traditional engines, the market share of EVs is only climbing. In fact, many of the most luxurious car brands in the world have committed to becoming electric-only on a varying scale of timelines.

So, with the future of road traffic looking entirely electric, it stands to reason that the batteries powering these cars could turn into major sources of cash, at all stages of their manufacturing.

Featured Image Credit: NurPhoto / Contributor / Getty
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