Back in 2018, electric car maker Tesla accused one of its engineers of stealing Autopilot technology secrets and jumping ship to Xpeng Motors, and now the case is escalating, with Tesla demanding that Xpeng disclose the source code for its autonomous driving technology, hand over images on computer hard drives, and even ask its employees involved in the case to be questioned.
Meanwhile, Tesla also asked for information from a former Apple employee who was accused of trying to steal former employer secrets in 2018 in order to get a new job at Xpeng.
Tesla claims that the two engineers found work at Xpeng almost simultaneously, allegedly using the same "untraceable" methods to steal sensitive documents from their American employers. Both engineers denied any wrongdoing.
Xpeng and the former Apple engineer denied Tesla's request for more information, and Tesla said in court documents that they engaged in improper intrusion.
A spokesperson for Xpeng's U.S. research agency XMotors said, "Tesla has crossed the line with its latest request, which attempts to rummage through our intellectual property under Tesla's terms and continually smears us with false statements and innuendo-ridden allegations."
According to the statement, Tesla tried to link the two Chinese engineers in order to "peddle unfounded speculation". A hearing on the Tesla subpoena will be held in federal court in San Francisco in May.
Xpeng is an Alibaba-backed automotive startup that is focused on competing in the Chinese market with Tesla over self-driving technology development.
Tesla built a multibillion-dollar factory near Shanghai last year, its first outside the U.S., and plans to open a design and engineering center in China.
Tesla said at least five former employees have jumped ship to Xpeng, including one who was hired by the latter as vice president of Autopilot in 2017 and will manage the Autopilot R&D team from 2018 to 2019.
In March 2019, Xpeng Chairman He Xpeng responded to Tesla's lawsuit, saying that both Xpeng and Tesla are innovators and that "talent flow" between the companies is normal.
Tesla argues that the defection of the company's engineers is so similar to the behavior of Apple's engineers that the company is entitled to an explanation from Xpeng as to whether the two engineers met with the same recruiters and executives and received similar pay.
Tesla said in the document: "The greater the similarities between the two cases, the less likely they are to be seen as purely coincidental and more likely the result of Xpeng orchestration and coordination."
But at least part of Tesla's narrative is suspect in describing the evidence.
Tesla said former Apple engineer Zhang Xiaolang was following the story in July 2018 when news broke that the company's former employee Cao Guangzhi was arrested at the San Jose, California airport as he was preparing to board a one-way flight to China.
At a later trial, Tesla cited a text message Cao Guangzhi sent to a friend at the time of his arrest, stating that Xpeng and Zhang Xiaolang had to "agree on a price" "in order to get the documents".
However, according to Cao Guangzhi's text message log filed with the court, it was his friend who initiated the conversation about the arrest in the first place and sent this quoted text message.
In a text message, Cao Guangzhi wrote that the arrest of the Apple engineer "left a bad impression on all Chinese people" and later wrote "I'm glad I didn't go to Xpeng, it was too risky".
Court documents show that Cao Guangzhi admitted he downloaded some of Tesla's source code on his iCloud account and personal device, but said he deleted the files before leaving the company and insisted he did not act inappropriately.
If found guilty, Cao Guangzhi could be sentenced to jail time.
Zhang Xiaolang also pleaded not guilty to the charges, claiming that forcing him to turn over the documents Tesla sought would undermine his constitutional right to object to self-incrimination. His lawyer declined to comment.
Xpeng said in a filing that the company has offered to assist Tesla's investigation and has responded through XMotors to previously received subpoenas, including the production of forensic images and more than 12,000 documents from Cao Guangzhi's laptop.
The fact that Tesla sought the latest information does not change the fact that there is no evidence that any trade secrets about Tesla were passed to Xpeng.
An XMotors spokesperson said: "Tesla's overstepping of boundaries and distortion of facts confirms that this is nothing more than its bullying and attempt to subvert its younger competitors."
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