Chinese electric-vehicle start-up Karma accused of stealing US rival’s plans for a ‘luxury Humvee’

Lawsuit claims Chinese auto-parts maker Wanxiang Group, owner of Karma, cuts it out of the venture to go it alone in the Chinese market

VLF is asking for at least US$18.5 million in damages to cover its investment in the Humvee project and share of projected profits

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The Fisker Karma, a plug-in hybrid luxury sports sedan produced by Fisker Automotive and manufactured at Valmet Automotive in Finland, is displayed during the Stockholm Car Festival in 2012: Photo: AFP

Published: 11:00am, 6 Aug 2020Updated: 11:29am, 6 Aug 2020

Chinese electric-vehicle start-up Karma Automotive LLC is being accused of stealing vehicle plans from a US company with which it discussed a joint venture, according to a lawsuit.

Michigan-based VLF Automotive, a niche carmaker co-founded by former General Motors executive Bob Lutz, filed suit against Karma in California Superior Court in June. VLF claims it shared its plans for a “luxury Humvee” with Karma last fall as part of a proposed partnership to produce the vehicle for the Chinese market, only to have Karma try to cut it out of the deal.

VLF is asking for at least US$18.5 million in damages to cover its investment in the Humvee project and its share of the projected profits.

The lawsuit comes as Karma, which is owned by Chinese auto-parts maker Wanxiang Group, is trying to capitalise on the rally in shares of EV makers such as Tesla and Nikola Corp, a hydrogen trucking start-up that went public in June. Karma told Bloomberg in early July it had raised a third of the US$300 million by selling stakes to private equity investors.

An employee works at a production line at a Wanxiang electric vehicle factory in Hangzhou, Zhejiang province in January 2014. Photo: Reuters

Karma Chief Strategy Officer Greg Tarr declined to comment on the lawsuit. A lawyer for VLF also declined to comment.