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Man Pleads Guilty to Stealing Major EV Maker’s Secrets

Reports indicate that the affected company is Tesla.

A German and Canadian national residing in China named Klaus Pflugbeil has pleaded guilty to stealing a U.S. electric vehicle company’s trade secrets and using them to build a China-based business. The Department of Justice release did not disclose the name of the American EV maker, but a New York Times article that reported Pflugbeil’s arrest in March named the mystery company as Tesla.

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According to the DOJ release, Pflugbeil stole trade secrets from a former employer that made and sold battery assembly lines. Pflugbeil’s former employer, which was identified by the Times as Hibar Systems, was acquired by Tesla in 2019. When Tesla acquired Hibar, it gained access to its proprietary continuous motion alkaline battery assembly, the trade secret at the center of the issue. 

By the end of 2019, Pflugbeil had reportedly mentioned to Yilong Shao, a former Hibar coworker and co-defendant still at large, that he possessed original documents related to Hibar’s technology. Shao confirmed that the pair could access PDF versions of the original assembly drawings.

The two used the documents to build the aforementioned Chinese business and tried to hide that the information was stolen by creating new documents based on the stolen data, but changed the format to make them seem original. 

Pflugbeil allegedly marketed the Chinese business as an alternative supplier of products and services similar to those previously offered by Hibar.

The two were busted when, in November 2023, Pflugbeil emailed a technical documentation proposal that contained the stolen trade secrets to an undercover FBI agent posing as a business person interested in buying a battery assembly line. 

Pflugbeil faces a maximum penalty of 10 years in prison.

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