A German-Canadian resident of China has been sentenced to 24 months in a U.S. prison for stealing electric vehicle trade secrets from Tesla for use in a competing EV battery business.
The U.S. Department of Justice announced the sentencing of 59-year-old Klaus Pflugbeil on Monday.
Pflugbeil pleaded guilty in June to working with his business partner, Yilong Shao, to sell Tesla’s battery manufacturing secrets to undercover FBI agents posing as businesspeople from Long Island. U.S. Assistant Attorney General Matthew Olsen said in a statement that Pflugbeil’s actions were meant to benefit the People’s Republic of China in a critical industry with national security implications.
Prosecutors stated that Pflugbeil and Shao built their electric vehicle battery business using trade secrets obtained from a “leading U.S.-based electric vehicle company.” While the company was not named, it was described as having acquired a Canadian battery-assembly line manufacturer in 2019, which aligns with Tesla’s purchase of Canadian company Hibar.
The Justice Department explained that both Pflugbeil and Shao previously worked for the Canadian company. Pflugbeil later joined Shao’s new business in 2020, which has operations in China, Canada, Germany, and Brazil. The new venture reportedly produces battery assembly equipment similar to that of their former employer.
According to prosecutors, undercover agents were approached by Shao at a Las Vegas trade show last year. A business proposal containing Tesla’s trade secrets was subsequently sent to the agents by Pflugbeil.
