Tesla Inc. TSLA and Rivian Automotive Inc. RIVN are nearing a settlement in a lawsuit over alleged theft of battery technology. The legal confrontation, which began in 2020, accused Rivian of recruiting Tesla employees to obtain confidential engineering data.

What Happened: Initially, Tesla alleged that Rivian hired ex-employees who brought sensitive documents with them.

The lawsuit later expanded to include claims of Rivian stealing core technology for advanced batteries. Despite efforts to settle outside of court, the case went to trial last year.

Tesla has informed the court of a conditional settlement agreement with Rivian, with plans to file for dismissal by Dec. 24, according to a Bloomberg report. The settlement terms remain undisclosed.

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Tesla, known for its openness with patents, has maintained that Rivian’s actions were deliberate theft. The focus on “next-gen batteries” hints at the possible involvement of Tesla’s 4680 battery cells.

Rivian, on the other hand, plans to use a taller 4695 battery for its future vehicles.

Tesla and Rivian did not immediately respond to a Benzinga request for comment.

Why It Matters: The lawsuit’s roots trace back to July 2020, when Tesla accused Rivian of employee poaching and intellectual property theft. Tesla described an “alarming pattern” of Rivian hiring its employees and obtaining its trade secrets.

In August 2020, Rivian hired Nick Kalayjian, a former Tesla executive, as its top engineer, despite the ongoing lawsuit. This move highlighted the competitive nature of the electric vehicle industry and the strategic importance of engineering talent.

By August 2023, the case was still unresolved, with a California court tentatively denying requests for summary adjudication, indicating the complexity and significance of the trade secrets involved.

Price Action: Tesla stock closed 3.80% higher on Friday at $352.56, according to Benzinga Pro data. Rivian stock edged up 2.20% to close at $10.24 on Friday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photos courtesy: Tesla and Rivian