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Trevor Milton’s indictment should set precedent for other CEOs

(Photo: Isaac Sloan/Nikola Motor)

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This is a preview from our weekly newsletter. Each week I go ‘Beyond the News’ and handcraft a special edition that includes my thoughts on the biggest stories, why it matters, and how it could impact the future. 

Earlier this week, former Nikola CEO Trevor Milton was indicted on two counts of securities fraud and one count of wire fraud, after misleading investors about the financial condition and basically every facet of Nikola’s operation. The indictments come after months of silence from Milton, who has basically disappeared into thin air following his resigning as Nikola’s CEO. The announcement of Milton’s charges, which were carried out by the U.S. Attorney Southern District of New York’s office, will set precedent for CEOs moving forward, especially for those who have announced major breakthroughs in electric vehicle technology without releasing any relevant products.

For the last 13 years, Tesla has combated companies and automakers that have set forth a path to dethrone the electric car entity from its post as the best EV maker in the world. However, Tesla has never been even remotely challenged by an all-electric car company that has been established in recent memory. Most likely, this is due to Tesla’s domination of the electric vehicle sector in nearly every category, including battery tech, software, vehicle design, and autonomy.

Nikola founder Trevor Milton indicted on three counts of fraud

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This has not stopped CEOs of other automakers from making outlandish claims with their vehicles, and Milton was just one of many. Since the 2018 lawsuit that Nikola filed against Tesla for allegedly taking design ideas from the Nikola One and implementing them into the Tesla Semi, it seems Milton has been the only CEO to actually convince some people that their product is meaningful and groundbreaking, despite not having much of a product at all. Considering Nikola admittedly misled shareholders about the capabilities of its all-electric commercial vehicle, there should be a hint to the CEOs of the companies that do and will exist in the future: don’t lie about your product, and don’t incite shareholders to believe something that is true.

This point should be common sense and should be evidently clear, but it is something that should set other CEOs of emerging automakers to tread carefully with their words and claims. Taking advantage of a highly marketable and quickly growing EV sector requires a strategic entrance into the market. Lying about the capabilities of what your vehicles might be able to do in the future, simply is not a great move. Over time, things may be established and successful with the dedication and hard work of teams of engineers and others. But until that day, it may be best to stop claiming things about the product, and simply release some kind of evidence that the company is not “an intricate fraud,” as Hindenburg Research called it.

When companies can effectively manufacture a product worth value and prove to people, especially shareholders, that they are for real about entering the sector, there is a significant amount of respect that heads toward the entity that came through. Skepticism is a commonly displayed trait, especially in the electric vehicle sector, because so many companies have come and gone, setting up their own expectations that are quite lofty, only to come short. This inevitably leaves many EV enthusiasts, especially Tesla owners and fans, feeling let down for what could eventually come.

Without a doubt, there will be some people that will inevitably take advantage of excited investors who are passionate about the possibility of sustainable energy and transportation. Based on the allegations set forth by the U.S. Department of Justice against Milton, he is one of those individuals and this statement could be proven in a federal courtroom in the coming months. “The one thing fraudsters have in common – they’re liars, cheaters, and thieves,” Inspector-in-Charge Phillip R. Bartlett said. He added that if an investment opportunity seems too good to be true, it probably is.

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-Joey

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla VP explains latest updates in trade secret theft case

Tesla reportedly caught Matthews copying the tech into machines that were sold to competitors, claiming they lied about doing so for three years, and continued to ship it. That is when Tesla chose to sue Matthews in July 2024 in Federal court, demanding over $1 billion in damages due to trade secret theft.

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tesla 4680
Credit: Tesla Inc.

Tesla Vice President Bonne Eggleston explained the latest updates in a trade secret theft case the company has against a former manufacturing equipment supplier, Matthews International.

Back in 2024, Tesla had filed a lawsuit against Matthews International, alleging that the firm stole trade secrets about battery manufacturing and shared those details with some of Tesla’s competitors.

Early last year, a U.S. District Court Judge denied Tesla’s request to block Matthews International from selling its dry battery electrode (DBE) technology across the world. The judge, Edward Davila, said that the patent for the tech was due to Matthews’ “extensive research and development.”

Tesla is suing a former supplier for trade secret theft

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The two companies’ relationship began back in 2019, as Tesla hired Matthews to help build the equipment for its 4680 battery cell. Tesla shared confidential software, designs, and know-how under strict secrecy rules.

Fast forward a few years, and Tesla reportedly caught Matthews copying the tech into machines that were sold to competitors, claiming they lied about doing so for three years, and continued to ship it. That is when Tesla chose to sue Matthews in July 2024 in Federal court, demanding over $1 billion in damages due to trade secret theft.

Now, the latest twist, as this month, a Judge issued a permanent injunction—a court order banning Matthews from using certain stolen Tesla parts or designs in their machines. Matthews is also officially “liable” for damages. The exact amount would still to be calculated later.

Bonne Eggleston, a VP for Tesla, said on X today that Matthews is a supplier who “exploited customer IP through theft or deception,” and has no place in Tesla’s ecosystem:

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Tesla calls this a big win and warns other companies: “Buyer beware—don’t buy from thieves.”

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Matthews hit back with a press release claiming victory. They say an arbitrator ruled they can keep selling their own DBE equipment to anyone and rejected Tesla’s request for a total sales ban. They call Tesla’s claims “nonsense” and insist their 20-year-old tech is independent. Both sides are spinning the same narrow ruling: Matthews can sell their version, but they’re blocked from using Tesla’s specific secrets.

What are Tesla’s Current Legal Options

The case isn’t over—it’s moving to the damages phase. Tesla can:

  • Push forward in court or arbitration to calculate and collect huge financial penalties (potentially $1 billion+ if willful theft is proven).
  • Enforce the permanent injunction with contempt charges, fines, or even jail time if Matthews violates it.
  • Challenge Matthews’ new patents that allegedly copy Tesla’s work, asking courts to invalidate them or add Tesla as co-inventor.
  • Seek extra damages, lawyer fees, and possibly punitive awards under the federal Defend Trade Secrets Act and California law.

Tesla could also refer evidence to federal prosecutors for possible criminal trade-secret charges (rare but serious). Settlement is always possible, but Tesla’s fiery public response suggests they want full accountability.

This isn’t just corporate drama. It shows why trade secrets matter even when Tesla open-sources some patents, confidential know-how shared in trust must stay protected. For the EV industry, it’s a reminder: steal from your biggest customer, and you risk losing everything.

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Tesla Cybercab includes this small but significant feature

The Cybercab is Tesla’s big plan to introduce fully autonomous ride-sharing in a seamless fashion. In fact, the Full Self-Driving suite was geared toward alleviating the need to manually drive vehicles.

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Credit: Tesla

Tesla Cybercab manufacturing is strikingly close, as the company is still aiming for an April start date. But small and significant features are still being identified for the first time as production units appear all over the country for testing and for regulatory events, like one yesterday in Washington, D.C.

The Cybercab is Tesla’s big plan to introduce fully autonomous ride-sharing in a seamless fashion. In fact, the Full Self-Driving suite was geared toward alleviating the need to manually drive vehicles.

This was for everyone, including the disabled, who are widely reliant on ride-sharing platforms, family members, and medical shuttles for transportation of any kind. Cybercab aims to change that, and Tesla evidently put a focus on those riders while developing the vehicle, evident in a small but significant feature revealed during its appearance in the Nation’s Capital.

Tesla Cybercab display highlights interior wizardry in the small two-seater

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Tesla has implemented Braille within the Cybercab to make it easier for blind passengers to utilize the vehicle. On both the ‘Stop/Hazard Lights’ button and the Door Releases, Tesla has placed Braille so that blind passengers can navigate their way through the vehicle:

This is a great addition to the Cybercab, especially as Full Self-Driving has been partially pointed at as a solution for those with disabilities that would keep them from driving themselves from place to place.

It truly is a great addition and just another way that Tesla is showing they are making this massive product inclusive for everyone out there, including those who have not been able to drive due to not having vision.

The Cybercab is set to enter mass production sometime in April, and it will be responsible for launching Tesla’s massive plans for an autonomous ride-sharing program.

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Elon Musk

Tesla and xAI team up on massive new project

It is the latest move by a Musk company to automate, streamline, and reduce the manual, monotonous, and tedious work currently performed by humans through AI and robotics development. Digital Optimus will be capable of processing and actioning the past five seconds of a real-time computer screen video and keyboard and mouse actions.

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Credit: Grok

Elon Musk teased a massive new project, to be developed jointly by Tesla and xAI, called “Digital Optimus” or “Macrohard,” the first development under Tesla’s investment agreement with xAI.

Musk announced on X that Digital Optimus will “be capable of emulating the function of entire companies.”

It is the latest move by a Musk company to automate, streamline, and reduce the manual, monotonous, and tedious work currently performed by humans through AI and robotics development. Digital Optimus will be capable of processing and actioning the past five seconds of a real-time computer screen video and keyboard and mouse actions.

Essentially, it will be an AI version of a desk worker in many capacities, including accounting, HR tasks, and others.

Musk said:

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“Grok is the master conductor/navigator with deep understanding of the world to direct digital Optimus, which is processing and actioning the past 5 secs of real-time computer screen video and keyboard/mouse actions. Grok is like a much more advanced and sophisticated version of turn-by-turn navigation software. You can think of it as Digital Optimus AI being System 1 (instinctive part of the mind) and Grok being System 2. (thinking part of the mind).”

Its key applications would be used for enterprise automation, simulating entire companies, high-volume repetitive tasks, and potentially, future hybrid use with the Optimus robot, which would handle physical tasks, while Digital Optimus would handle the clerical work.

Tesla announces massive investment into xAI

The creation of a digital AI suite like Digital Optimus would help companies save time and money, as well as become more efficient in their operations through massive scalability. However, there will undoubtedly be concerns from people who are skeptical of a fully-integrated AI workhorse like this one.

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From an energy consumption perspective and just a general concern for the human workforce, these types of AI projects are polarizing in nature.

However, Digital Optimus would be a great digital counterpart to Tesla’s physical Optimus robot, as it would be a hyper-efficient addition to any company that is looking for more production for less cost.

Musk maintains that there is no other company on Earth that will be able to do this.

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