Tesla Sues Former Supplier for $1 Billion Over Alleged Battery Tech Theft

Tesla accuses Matthews International of stealing trade secrets related to its dry electrode battery manufacturing process.

Published on Mar. 10, 2026

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Tesla has filed a major lawsuit against its former supplier, Matthews International, accusing the company of stealing trade secrets related to its critical dry electrode battery manufacturing process. Tesla alleges that Matthews shared its proprietary innovations with competitors and claimed the inventions as its own in patent filings, and the automaker estimates the damages from this breach exceed $1 billion.

Why it matters

This lawsuit highlights the high stakes and intense competition in the electric vehicle battery technology space, where manufacturers are racing to develop more efficient and cost-effective battery production methods. The outcome could have significant implications for Tesla's relationship with its suppliers and the broader EV industry.

The details

The legal action, filed in the U.S. District Court for the Northern District of California, alleges that Matthews shared Tesla's proprietary Dry Battery Electrode (DBE) technology with competitors and claimed the inventions as its own in patent filings. Tesla says this manufacturing breakthrough can dramatically reduce the cost, energy consumption, and size of battery production plants while boosting vehicle range.

  • Tesla began working with Matthews International in 2019.
  • Tesla recently obtained a permanent injunction preventing further theft from the company.
  • The lawsuit was filed on March 10, 2026.

The players

Tesla

An American electric vehicle and clean energy company that designs and manufactures electric cars, battery energy storage from home to grid-scale, solar panels, and related products.

Matthews International

A Pittsburgh-based supplier that provides products and services to various industries, including the funeral, brand solutions, and memorialization markets.

Bonne Eggleston

A Tesla executive who issued a scathing statement regarding the lawsuit against Matthews International.

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What they’re saying

“Buyer beware: Matthews International stole Tesla's DBE technology and is now subject to an injunction and liable for damages. During our work with Matthews, we caught them red-handed copying our technology—including proprietary software and sensitive mechanical designs—into products for other customers.”

— Bonne Eggleston, Tesla Executive

“Recently, we obtained a permanent injunction preventing further theft from Tesla, with financial damages to be computed. Matthews is now publishing complete nonsense to cover their tracks. To correct the record: Matthews was found liable for distributing Tesla's technology into practically every substantial DBE machine they've sold, and their ridiculous claim of ownership over our patents is in active dispute.”

— Bonne Eggleston, Tesla Executive

“Suppliers who exploit customer IP through theft or deception have no place in Tesla's ecosystem—or in any ethical supply chain.”

— Bonne Eggleston, Tesla Executive

What’s next

The judge will decide on the injunction and financial damages sought by Tesla against Matthews International.

The takeaway

This case highlights the importance of protecting intellectual property and the risks suppliers face when they are accused of stealing trade secrets. It also underscores the fierce competition in the electric vehicle battery technology space, where manufacturers are constantly seeking to gain an edge through innovative manufacturing processes.