Two men have been accused of using stolen Tesla trade secrets to establish their own Chinese-based competitor, reports say
Patrick Pleul/Pool via AP
- Two men have been accused of stealing trade secrets from a leading US EV company.
- Prosecutors did not name the EV company but multiple reports identified the company as Tesla.
- The case centers around the technology used to manufacture batteries for electric cars.
Two men have been accused of conspiring to share trade secrets belonging to a leading US EV company.
Federal prosecutors did not name the EV company, referring to it only as "victim company-1," but The New York Times and other publications identified the company as Elon Musk's Tesla.
Klaus Pflugbeil, a Canadian national and resident of China, was arrested on Tuesday after being accused of sending undercover law enforcement officers trade secrets that belonged to "a leading US-based electric vehicle company," a statement released by the US Department of Justice said.
Pflugbeil was accused of conspiring with codefendant Yilong Shao, of Ningbo, China, who is still at large. The pair were accused of using the stolen confidential information to establish their own Chinese-based competitor, prosecutors said.
Pflugbeil and Shao are accused of stealing tech used in the battery manufacturing process that "victim company-1" spent at least $13 million developing. Prosecutors said the technology provided a "substantial competitive advantage" to the company in the battery manufacturing process.
Assistant Attorney General Matthew G. Olsen of the Justice Department's National Security Division said: "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, added.
If convicted, Pflugbeil faces a maximum penalty of 10 years in prison.
Representatives for Tesla did not immediately respond to a request for comment from Business Insider, made outside normal working hours.
Pflugbeil did not respond to BI's request for comment made via LinkedIn.