Tesla Sues Ex-Supplier for Alleged $1B+ Battery Trade Secret Theft

has filed a bombshell lawsuit against its former supplier Matthews International, accusing the company of stealing trade secrets related to electric vehicle and sharing them with Tesla's competitors. The suit, filed Friday in federal court, claims damages exceeding $1 billion, reports Reuters.

According to the complaint, Matthews began supplying Tesla with manufacturing machinery in 2019. During this partnership, Tesla shared confidential information about its innovative dry-electrode coating process, which can significantly reduce battery plant size, cost, energy use, and production time while increasing battery cell energy density and power.

However, Tesla alleges that Matthews betrayed their trust by selling “machines and other technologies embodying Tesla's trade secrets” to unnamed rivals. The lawsuit also asserts that Matthews tried to claim Tesla's inventions as its own in patent filings, revealing sensitive Tesla data.

In a statement Monday, Matthews called the lawsuit “simply a new tactic in their ongoing efforts to bully Matthews and improperly take Matthews' valuable intellectual property.” The supplier vowed to “vigorously defend the matter.”

Tesla is seeking an injunction to stop Matthews from further misusing its trade secrets, the transfer of questionable patent applications, and over $1 billion in monetary damages. Representatives for both companies did not immediately respond to requests for additional comment.

EVXL's Take

This high-stakes legal battle underscores the cutthroat competition and intellectual property wars raging in the rapidly evolving EV industry. As major automakers like Tesla race to develop cheaper, more efficient, longer-lasting batteries, the stakes couldn't be higher.

If the allegations prove true, Matthews' actions represent a serious breach of trust and confidentiality that could have far-reaching implications for Tesla's battery tech advantage and the broader EV market. The outcome of this lawsuit will be closely watched and could set important precedents around trade secret protections in the industry.

While legal fights like this can be ugly, they are often a necessary evil to defend hard-earned innovations and maintain a level playing field. Ultimately, the biggest winners will hopefully be consumers, who stand to benefit from continuous battery advancements that EVs more affordable, convenient, and environmentally friendly.

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Haye Kesteloo
Haye Kesteloo

Haye Kesteloo is the Editor in Chief and Founder of EVXL.co, where he covers all electric vehicle-related news, covering brands such as Tesla, Ford, GM, BMW, Nissan and others. He fulfills a similar role at the drone news site DroneXL.co. Haye can be reached at haye @ evxl.co or @hayekesteloo.

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