Takeaway: Brooklyn prosecutors charged Klaus Pflugbeil and his Chinese partner with trying to sell Tesla’s battery technology secrets, leading to Pflugbeil’s arrest for sending trade secrets to undercover agents and a possible 10 year prison sentence.

Brooklyn federal prosecutors have charged Klaus Pflugbeil, a Canadian residing in China, and his Chinese business partner with attempting to sell Tesla’s secret battery manufacturing technology. This comes after Pflugbeil’s arrest for sending multiple Tesla trade secrets to undercover agents and meeting with individuals he wrongfully believed were Long Island-based businesspeople. The charges include conspiring to send a “battery assembly trade secret” to a person in New York, and prosecutors are seeking Pflugbeil’s detention, citing a risk of flight.

Pflugbeil and his co-defendant, Yilong Shao, who remains at large, set up their company in Canada and China to manufacture and sell battery technology using stolen confidential information from their former employer, Hibar Systems, which was acquired by Tesla in 2019. They opened their business in 2020, operating in multiple countries and producing products similar to those made by Hibar and Tesla using the proprietary technology. If convicted, Pflugbeil faces up to 10 years in prison.