Tesla Files Lawsuit Against Former Battery Supplier

Tesla has taken legal action against its former supplier, Matthews International, accusing the Pittsburgh-based company of misappropriating trade secrets related to Tesla’s battery-manufacturing technology. The lawsuit, lodged in the U.S. District Court for the Northern District of California, seeks substantial damages and other remedies.

Tesla began its business relationship with Matthews International in 2019, enlisting the supplier to provide machinery for its manufacturing processes. During this collaboration, Tesla alleges it shared confidential details about its dry-electrode coating process with Matthews.

This process is pivotal to Tesla’s goal of advancing electric vehicle (EV) battery performance and production. According to Tesla, it has the potential to significantly enhance the efficiency and effectiveness of battery production. The technology promises to reduce the size, cost, and energy consumption of manufacturing plants, while simultaneously increasing the energy density and power of the battery cells.

The lawsuit contends that Matthews breached this trust by disseminating Tesla’s proprietary information to unspecified competitors. Tesla claims that Matthews sold machinery and technologies incorporating these trade secrets to other companies in the EV sector, thus compromising Tesla’s competitive edge. Moreover, the lawsuit accuses Matthews of filing patent applications that unjustly claim Tesla’s innovations as its own, thereby revealing confidential information.

In response to these allegations, Tesla is seeking several forms of legal relief. The company is asking the court to prohibit Matthews from further misuse of its trade secrets and to compel Matthews to relinquish any patent applications derived from Tesla’s proprietary information. Additionally, Tesla is demanding monetary damages, which it “conservatively estimates will exceed $1 billion,” to compensate for the alleged misuse of its intellectual property.

Representatives from both Tesla and Matthews, as well as their legal teams, are yet to provide any public comments regarding the lawsuit. The outcome of this case could have significant implications for the competitive dynamics within the EV battery industry, highlighting the critical importance of safeguarding technological innovations in this rapidly evolving sector.