Canadian National Pleads Guilty to Stealing US EV Co.'s Trade Secrets to Set Up Shop in China

Canadian and German national Klaus Pflugbeil, who lives in China, pleaded guilty June 13 to conspiring to steal the trade secrets of an unnamed U.S.-based electric vehicle company to build his own company in China, DOJ announced. He faces a maximum 10-year prison stint following sentencing on Oct. 9.

Pflugbeil was charged alongside his business partner, Yilong Shao, who remains at large. The pair owned a China-based business that sold technology used to make batteries, including those used in electric vehicles, DOJ said. Pflugbeil is a former employee of a Canadian manufacturer of "automated, precision dispensing pumps and battery assembly lines" that was bought by the U.S. EV company in 2019. The Canadian company sold battery assembly lines to buyers who make alkaline and lithium-ion batteries for consumer use, DOJ said.

These assembly lines had proprietary technology that was then owned by the unnamed U.S. firm following its purchase of the Canadian manufacturer. DOJ said this information gave the U.S. firm a "substantial competitive advantage" in the battery-making process.

Starting around 2019, Pflugbeil and Shao plotted to use the U.S. company's trade secrets to set up their own shop in China, planning to take all the "original assembly drawings" from the company. Pflugbeil bought ads online showcasing that it could replace the parts made by the former employer.