A resident of Ningbo, China, Klaus Pflugbeil, was sentenced to 24 months in prison by a federal court in the Eastern District of New York yesterday (16th) for conspiring to steal commercial secrets from electric car manufacturer Tesla and assisting in establishing a competing enterprise in China. His accomplice Yilong Shao is currently on the run.
Pflugbeil, who holds Canadian and German nationality, and another accomplice Yilong Shao were involved in the espionage operation. Shao is the founder of a technology company in China specializing in selling battery manufacturing technology, including electric vehicle batteries. The two were former employees of a Canadian subsidiary of the victim company, where they misused their positions to steal trade secrets and used them to set up a business in China, promoting their products as alternatives to the victim company’s technology.
According to the prosecution, in 2019, the victim company acquired a battery assembly line manufacturer in Canada that possessed technology for “continuous motion battery assembly,” which significantly increased production efficiency. Pflugbeil and Shao plotted to use this technology for themselves even before the acquisition and attempted to cover up their actions by stealing numerous original technical drawings and falsifying documents to make them appear as original content. In 2020, Pflugbeil joined Shao’s company, which rapidly expanded its operations in multiple countries.
In 2023, an undercover FBI agent made contact with Pflugbeil and his company, posing as someone else, eventually obtaining evidence proving his illegal use of the victim company’s technology. In March 2024, Pflugbeil was arrested in Long Island, New York, during a meeting with an undercover agent posing as a Long Island businessman. He pleaded guilty in June of the same year.
Federal prosecutor Breon Peace stated, “Pflugbeil’s actions were bold and shocking; he even falsely claimed to sell the victim company’s products in advertisements. He mistakenly believed he could escape the consequences of US law, but today’s judgment demonstrates that we will vigorously protect American innovation and national security.”
Assistant Attorney General for National Security Matthew G. Olsen remarked, “Pflugbeil stole trade secrets from an American electric car manufacturer and used them for his company in China, benefiting China in this crucial industry involving national security. We will mobilize all resources to prevent our adversaries from advancing their global ambitions at the expense of sacrificing American national security.”
The victim company in this case is suspected to be Tesla, which acquired the Canadian company Hibar in 2019, obtaining core battery technology. Pflugbeil and Shao’s actions are seen as contributing to China gaining an unfair advantage in the battery technology field.