Tesla's 'Ulterior Motive' In Suing Rivian Was To Malign Its Image, Threaten Employees, Rival Retorts

Rivian Automotive Inc. is accusing Tesla Inc. TSLA of damaging its reputation, in response to a lawsuit the Elon Musk-led company filed against it, TechCrunch reported Tuesday.

What Happened

The Michigan-based electric vehicle maker asked the court to dismiss the lawsuit, saying, two of the three claims made by Tesla fail to make the case for trade-secret theft or poaching talent, according to TechCrunch.

Another claim of breach of contract, against four former workers of Tesla, was reportedly not included in the filing for dismissal made by Rivian, as it does not relate directly to the company.

In the lawsuit, Rivian says Tesla's "ulterior motive" wasn't just "maligning Rivian," TechCrunch reported. Rather, it also intended "to send threatening messages to its own employees: don’t dare leave Tesla."

Why It Matters

Last month, Tesla sued Amazon.com, Inc AMZN-backed Rivian, citing an “alarming pattern” of employee poaching and theft of intellectual property. 

The apex EV maker alleged that it was the “number one target” for obtaining information for Rivian.

Rivian was reported to have hired 178 former employees of the Musk-led firm, 70 of which joined the Michigan company directly after quitting Tesla.

Price Action 

Tesla shares traded 6.46% higher at $1,463.23 in the after-hours session on Tuesday, after the company announced a 5-for-1 split of its common stock.