Tesla drops lawsuit against former engineer, ending theft allegations that dragged in Chinese competitor Xpeng

Name: Tesla exports first China-made cars to Europe with shipment of 7,000 Model 3 electric sedans
Uploaded: 2021-04-16T09:15:17.000Z
Duration: 1 min 16 s
Description: Tesla exports first China-made cars to Europe with shipment of 7,000 Model 3 electric sedans

Tesla had accused Cao Guangzhi, an engineer, of misappropriation of trade secrets, breach of contract and breach of the duty of loyalty

Terms of settlement are confidential, but include a monetary payment to be made by Cao to Tesla

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A Tesla showroom in Shanghai. Xpeng, which was not a party to the law suit, said its self-driving system was developed independently and had nothing to do with Tesla’s system. Photo: Bloomberg

Daniel Ren

Published: 5:15pm, 16 Apr 2021Updated: 11:37pm, 16 Apr 2021

Tesla, the market leader in China’s booming electric vehicles (EVs) market, has reached an out-of-court settlement with a former staff member who was briefly employed by Xpeng, one of its most aggressive competitors in the country, ending a two-year-long suit that alleges the theft of the US carmaker’s Autopilot system.

Tesla and former engineer Cao Guangzhi reached an agreement on Thursday to “resolve all claims asserted in this action”, according to court documents. The terms of the settlement are confidential, but include a token monetary payment to be made by Cao to Tesla. Cao, who has since also left Xpeng’s staff, also apologised to Tesla, having admitted that he did copy the source code on his personal cloud-based account, that its retention was inadvertent and that he did not disclose it to Xpeng or any other third party, according to the court documents.

“Xpeng is pleased that Tesla and Cao have finally resolved their disputes,” in particular arriving at a resolution “that allows Cao to move forward with his career,” the Guangzhou-based carmaker said, adding that Xpeng was never a party to the law suit. Tesla executives in Shanghai declined to comment.

The settlement puts an end to a cloud hanging over New York-listed Xpeng as it pushes aggressively into China’s EV industry, which may balloon to 45 per cent of vehicles by 2040, according to a forecast by Fitch.

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Tesla exports first China-made cars to Europe with shipment of 7,000 Model 3 electric sedans

Tesla had accused Cao of misappropriation of trade secrets, breach of contract and breach of the duty of loyalty, in a lawsuit filed with the United States District Court, Northern District of California. The carmaker claimed that during his employment with Tesla, Cao took copies of source code related to its Autopilot system by uploading it to his personal iCloud account, and that he retained these copies after he resigned in January 2019 and began working for Xpeng in breach of his agreements with Tesla and state and federal law.

The Chinese carmaker says its Navigation Guided Pilot self-driving system was developed independently using proprietary coding and had nothing to do with Tesla’s system.

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