Tesla Claims Rival Rivian Continues Illegal Activities Despite Lawsuit
Tesla, Inc. recently announced that it's escalating its lawsuit against rival automobile manufacturer Rivian Automotive LLC for allegedly continuing its illegal activities against the company.
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According to a court filing in late September 2021, the electric vehicle (EV) giant stated that it caught Tesla defectors stealing its "highly proprietary" battery technology red-handed during summer 2021, despite the company filing a lawsuit in July 2021 against Rivian for stealing trade secrets and poaching its employees. The technology in question was said to be "the most essential element for any electric vehicle", per Bloomberg.
Tesla also said that Rivian's alleged illegal efforts were due to pressure from investors as they haven't produced a single commercial vehicle after almost 12 years.
The timing of these allegations could be bad for Rivian. You may remember that Rivian filed for an initial public offering (IPO) of approximately US$80 billion around 25 November 2021, just in time for Thanksgiving. However, the exact timing would depend on when the U.S.'s Securities and Exchange Commission approves the IPO.
In late September 2021, a state judge in San Jose, California, allowed Tesla to add its new allegations to its existing lawsuit against Rivian, filed in July 2020. Rivian, an Amazon backed startup, protested against the inclusion, arguing that it would only delay the case's resolution and that the new allegations against them are not factual.
Rivian also said in a filing of its own that Tesla "dragged its feet" since July 2020 and that Tesla had not sufficiently specified which trade secrets were stolen and how these secrets were different from what's already publicly known.
At the time of the lawsuit's filing, Tesla alleged that Rivian actively recruits Tesla employees and encourage them to take proprietary information as they leave. The company also added that it eventually discovered this pattern in its former employees who recently left Tesla to join Rivian.
Tesla said in its complaint that Rivian instructed a departing Tesla employee at the time about the information Rivian needs. Despite the employee's non-disclosure agreement, the employee, nonetheless, expropriated the exact information Rivian wanted, which would give them a huge competitive advantage.
A Rivian R1T pick-up truck (left), and a Tesla Cybertruck (right). Credit: Rivian ; u/Kruzat
Rivian would later claim in August 2020 that Tesla's two of the three claims in its lawsuit had failed to state enough allegations of them poaching Tesla's employees and stealing trade secrets. Rivian also called the lawsuit an attempt to tarnish its reputation and harm its recruiting efforts.
The company would later request for the lawsuit to be dismissed but was declined in March 2021.
Rivian has yet to comment on Tesla's new allegations against it.
Written by John Paul Joaquin