Canadian Resident of China Pleads Guilty in New York to Stealing EV Battery Secrets

The U.S. Department of Justice in Washington on June 28, 2023. Madalina Vasiliu/The Epoch Times

A Canadian resident in China pleaded guilty in New York federal court to conspiring to steal trade secrets from a major U.S. electric vehicle (EV) maker, according to the Department of Justice (DOJ).

Klaus Pflugbeil, 58, worked for a Canadian manufacturer that sold precision dispensing pumps and assembly lines to alkaline and lithium-ion battery makers, the DOJ said in a June 13 statement. The U.S. company bought the firm in 2019, gaining a “substantial competitive advantage,” according to the statement.

While the DOJ didn’t identify the firm, the description matches Canadian company Hibar Systems Ltd., which was acquired by Tesla in 2019. Mr. Pflugbeil’s LinkedIn and Xing profiles say he worked for Hibar in Canada and China until 2009.

According to a court document, Mr. Pflugbeil worked for the Canadian company for 12 years, once leading the office in China, and had access to drawings and diagrams of the company’s battery manufacturing trade secrets.

Shao Yilong, a sales and service technician for the Canadian company from 2010 to 2020, is accused of plotting with Mr. Pflugbeil but remains at large, according to the document.

In July 2020, Mr. Pflugbeil and Mr. Shao opened a business entity with locations in Brazil, Canada, China, and Germany that made “the same precision dispensing pumps and battery assembly lines” as the U.S. EV maker, the court document states.

Mr. Pflugbeil then marketed the business “as an alternative source for the sales of products that use [the U.S. EV maker’s] trade secrets,” according to the court document.

Mr. Pflugbeil created a LinkedIn profile and a YouTube account for the business in 2022, the court document states. He also purchased ads on Google for the business, including one that stated: “Are you looking for [U.S. EV maker’s] metering pumps and spare parts? Look no further.”

In September 2023, undercover FBI agents went to a trade show in Las Vegas and posed as businesspeople interested in buying a battery assembly line to be used in Long Island, New York. The agents met with Mr. Shao at the event but not Mr. Pflugbeil.

About two months later, Mr. Pflugbeil sent a 66-page document to the FBI agents. In the document, at least half of a dozen drawings contained the U.S. EV maker’s information, according to the DOJ.

He was arrested on March 19, the day he flew from Hong Kong to John F. Kennedy International Airport in Queens, New York, to finish negotiating a deal related to the assembly line.

On June 13, Mr. Pflugbeil pleaded guilty to conspiring to send trade secrets. Sentencing is set for Oct. 9. The charge carries a maximum sentence of 10 years in prison.

“Despite Pflugbeil’s agreement to protect what he knew was proprietary, sensitive technology, he chose to abscond with these trade secrets to China, where he sought an unfair and illegal advantage in critical industries such as electric vehicle manufacturing,” Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division said in a statement.

“With his guilty plea, Pflugbeil is now being held accountable for this unlawful conduct that jeopardized our national security.”

Representatives for Tesla didn’t respond by press time to a request by The Epoch Times for comment.