Two owners of a China-based electric vehicle technology company have been accused of stealing Tesla’s battery assembly line technology for their own benefit, Reuters reports. The report cites US prosecutors’ claims in a complaint unsealed Tuesday in Brooklyn.
Issue
One of the owners, who was recently arrested in the United States, is a Canadian based in China. He, along with his business partner Yilong Shao, allegedly stole Tesla’s trade secrets and schemed to sell them. However, he ended up selling them to undercover law enforcement officers.
According to US prosecutors, the defendant reportedly traveled from China to New York for a meeting with potential buyers, whom he thought were Long Island business people. Mr. Shao remains at large as of now.
It is worth noting that the prosecutors did not reveal the name of the US-based company. However, court documents referred to the company as a ” leading electric vehicles manufacturer” and provided more details that matched the Musk-led automaker.
For instance, it indicated that the company bought a Canada-based maker of battery assembly lines in 2019. It matched the description of Tesla’s takeover of a Canadian company named Hibar Systems.
Defendants’ connection with Tesla
As mentioned, Tesla acquired Hibar in 2019. Interestingly, Both Klaus Pflugbeil and Yilong Shao are former employees of the Canadian company, according to the prosecutors’ findings. In fact, Pflugbeil is reportedly the former president of Hibar.
The two China-based business owners allegedly stole a battery manufacturing technology that Tesla spent at least $13 million to develop.
“This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge. When American economic intelligence is stolen by foreign businesses, it not only harms the victim companies, but also threatens our financial infrastructure.”
James Smith, the assistant director in charge of the FBI New York field office
If proven guilty, Pflugbeil and Shao may get a maximum penalty of 10 years in prison in the US. Tesla has yet to confirm whether it is actually the victimized electric automaker in court filings.
