Electric battle: Tesla sues former supplier Matthews for alleged theft of battery trade secrets

Tesla has filed a lawsuit against its former supplier, Matthews International, accusing the company of stealing and misusing its battery-manufacturing trade secrets. The lawsuit, lodged in the U.S. District Court for the Northern District of California, asserts that Matthews shared these secrets with Tesla’s competitors.

Tesla claims the damages from this alleged misuse of its proprietary dry electrode battery manufacturing technology could exceed $1 billion. The electric vehicle giant insists that its trade secrets are vital to its innovative manufacturing process, which aims to reduce the size, cost, and energy consumption of battery plants while enhancing battery performance.

In a statement, Matthews International fired back, saying, “Tesla’s lawsuit is simply a new tactic in their ongoing efforts to bully Matthews and improperly take Matthews’ valuable intellectual property.” The company vowed to “vigorously defend the matter.”

The relationship between the two companies began in 2019 when Pittsburgh-based Matthews started supplying Tesla with manufacturing machinery. According to the complaint, Tesla shared critical secrets about its dry-electrode coating technology, which has the potential to revolutionize battery production.

Tesla alleged that Matthews betrayed this trust by selling machines and technologies that embodied Tesla’s trade secrets to unnamed competitors. Moreover, Tesla accuses Matthews of filing patent applications that reveal confidential information, falsely claiming Tesla’s innovations as its own.

As part of the lawsuit, Tesla is seeking an injunction to prevent Matthews from further misusing its trade secrets and to compel Matthews to hand over its patent applications. Additionally, Tesla is pursuing significant monetary damages.

Read more on U.S. investigates Tesla’s 2 million vehicle recall over autopilot lapses.