Image: Tesla
Tesla has filed a major lawsuit against its former supplier, Matthews International, accusing the company of stealing trade secrets related to its critical dry electrode battery manufacturing process.
The legal action, filed in the U.S. District Court for the Northern District of California, alleges that Matthews shared Tesla’s proprietary innovations with competitors and claimed the inventions as its own in patent filings, reports Reuters.
Tesla conservatively estimates the damages from this breach exceed $1 billion. The dispute centers on Dry Battery Electrode (DBE) technology, a manufacturing breakthrough that Tesla says can dramatically reduce the cost, energy consumption, and size of battery production plants while simultaneously boosting vehicle range.
In a scathing statement regarding the lawsuit, Tesla executive Bonne Eggleston warned the industry to stay away from the supplier. Eggleston stated:
“Buyer beware: Matthews International stole Tesla’s DBE technology and is now subject to an injunction and liable for damages. During our work with Matthews, we caught them red-handed copying our technology—including proprietary software and sensitive mechanical designs—into products for other customers.”
Eggleston further alleged that Matthews spent three years attempting to hide their actions while continuing to ship Tesla’s technology to others.
“Recently, we obtained a permanent injunction preventing further theft from Tesla, with financial damages to be computed. Matthews is now publishing complete nonsense to cover their tracks. To correct the record: Matthews was found liable for distributing Tesla’s technology into practically every substantial DBE machine they’ve sold, and their ridiculous claim of ownership over our patents is in active dispute.”
Pittsburgh-based Matthews International began working with Tesla in 2019. In a response to the lawsuit, Matthews called Tesla’s claims “utterly without merit” and described the legal action as a bullying tactic intended to improperly take Matthews’ own intellectual property. The supplier has vowed to vigorously defend itself in court.
Tesla is asking the court to block Matthews from further misusing its secrets and to force the supplier to hand over its related patent applications. As Eggleston concluded, “Suppliers who exploit customer IP through theft or deception have no place in Tesla’s ecosystem—or in any ethical supply chain.”