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Tesla Inc. (NASDAQ:TSLA) has reportedly initiated a legal battle against its former supplier, Matthews International Corp (NASDAQ:MATW), accusing the company of misappropriating trade secrets.
This lawsuit, filed in the U.S. District Court for the Northern District of California, centers on allegations that Matthews shared proprietary battery manufacturing technology with Tesla’s rivals, reported Reuters.
The legal action claims that Matthews International caused damages potentially exceeding $1 billion due to the alleged misuse of Tesla’s innovative dry electrode battery technology.
This technology is crucial for enhancing the performance and cost-efficiency of batteries, a core component of Tesla’s business strategy.
According to the complaint, Matthews began its relationship with Tesla in 2019 as a supplier of manufacturing machinery.
During the partnership, Tesla shared key details about its dry-electrode coating process, which is designed to significantly reduce the physical footprint and production costs of battery manufacturing facilities, while also increasing the energy density and power of the battery cells.
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The lawsuit further alleges that Matthews not only shared these secrets with Tesla’s competitors but also attempted to claim Tesla's innovations as its own.
It is reported that Matthews has made patent filings that include confidential Tesla technologies, thus disclosing protected information.
Tesla is now seeking a court injunction to prevent Matthews from continuing to disclose its trade secrets.
Additionally, the electric vehicle manufacturer is demanding that Matthews hand over all relevant patent applications and compensate Tesla for monetary damages caused by these breaches of confidentiality.
Tesla stock has lost more than 32% in the last 12 months. Investors can gain exposure to the stock via ETFs, including Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) and Fidelity MSCI Consumer Discretionary Index ETF (NYSE:FDIS).
Price Action: TSLA shares are trading higher by 4.34% at $185.74 at last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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