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Chinese NEV Startup Accuses Tesla of ‘Bullying’ Over IP Suit

By Isabelle Li and Liu Yukun / Apr 28, 2020 04:08 PM / Business & Tech

Chinese electric car startup Xpeng Motors accused Tesla Inc. of using a “fishing expedition” to “bully” the younger competitor, firing the latest legal salvo in the companies’ ongoing battle over alleged intellectual property theft.

Tesla earlier this year asked a U.S. federal judge to grant it access to Xpeng’s company files — including those on the company chairman’s own computer — as part of its yearlong law suit against an engineer who departed the U.S. giant in January 2019 and returned to China two months later to work for the Guangzhou-based carmaker.

Tesla alleges Guangzhi Cao didn’t just take his knowledge and experience but more than 300,000 files of secret source code for the Silicon Valley startup’s driver assistance project “Autopilot,” which Tesla claims he shared with Xpeng.

Cao has admitted to downloading Tesla material while working there, but said he did so for use in his remote office and that the practice was not unusual. He said he had “diligently and earnestly attempted to remove any and all Tesla intellectual property and source code from his own personal devices” prior to leaving the company.

In January, Tesla asked a federal judge in California to extend the scope of its investigation by granting it access to Xpeng’s autonomous vehicle-related source code, alongside complete copies of employee hard drives including those of the company’s founder He Xiaopeng.

In a filing with the California court Saturday, Xpeng said it “never disputed” Tesla’s claim that Cao downloaded its material while employed there and before he joined the Chinese startup, but denied that indicated any wrongdoing by Xpeng.

“After months of litigation, Tesla has failed to show any credible evidence that XMotors ever possessed, let alone used, any Tesla information from Dr. Cao,” Xpeng said in a Friday statement.

In its suit against Cao, which names Xpeng as a third party, Tesla alleges the Chinese startup “reportedly designed its vehicles around Tesla’s open-source patents and has transparently imitated Tesla’s design, technology and even its business model.” The Silicon Valley tech giant said Xpeng had introduced “Autopilot-like” features and employs at least five of Tesla’s former Autopilot employees, including Cao.

The U.S. District Court of Northern California in San Jose will convene May 7 to decide whether to compel Xpeng to hand over the materials.

Contact reporter Isabelle Li (liyi@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)


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