Car Wars: 10 Electric Car Lawsuits

Electric car makers take to the courtroom more often than the highway.

While the goal of most automakers is to make money making cars, it appears that electric car companies have another side pursuit—suing competitors. Is this all about the massive ego necessary to launch a car company? Or is it just something about electric cars? You be the judge. Here’s a rap sheet of high-profile lawsuits regarding electric and hybrid cars.

Tesla vs. Fisker

Tesla and Fisker, two Western start-up electric car companies, are playing out a classic movie Western scene where one says, “This town’s not big enough for the both of us.” Here’s the synopsis: Tesla hires Fisker for design work on its second model. Fisker submits designs and is paid. Fisker starts its own electric vehicle company. Tesla sues Fisker for submitting a sub par design and stealing trade secrets. Pause for legal wrangling. Judge decides in favor of Fisker and arbiter awards Fisker $1.4 million in legal fees.

Vespremi, et al, vs. Tesla

David Vespremi

David Vespremi.

Tesla’s former PR director, David Vespremi, filed a class-action lawsuit in July 2008, suing the company for “violating the terms of his employment, not acting in good faith, violating California labor codes, failing to pay wages owed, and practicing fraudulent business practices.” In addition, he sued for libel and slander because of remarks that Tesla execs made to the press after he was laid off. The suit doesn’t name the other members of the class. Claims will not exceed $75,000.

Magna vs. Tesla

Tesla Roadster's single-speed transmission.

Tesla Roadster’s single-speed transmission.

Magna, a Canadian-based component supplier and engineering subcontractor to many automakers around the world, charged that Tesla asked the company to build a transmission for its electric roadster, which it delivered. But Tesla walked away without paying. Meanwhile, Magna says it will roll out its own plug-in car in 2010—but only in markets where its customers don’t sell cars.

The People vs. Michael Papp

Michael Papp, the head of another electric car startup, Spark EV, went to jail after being charged with failing to deliver 14 electric vehicles for which he was paid $100,000. His retort was that he was filing for bankruptcy—for the fourth time—but that the cars will still be delivered.

ZAP vs. DaimlerChrysler (as it was known at the time)

Smart ForTwo Crash Testing

Smart ForTwo Crash Testing.

California-based ZAP, a company that sells a variety of electric scooters, bikes and three-wheeled electric vehicles, wanted to be the first to bring Smart cars to the United States. Reuters reported in 2005 that ZAP ordered $1 billion worth of vehicles from Smart. DaimlerChrysler said it was unaware of the order. ZAP sued Daimler over what it termed “severe misconduct” and interference with ZAP’s business. The suit was initially thrown out of California’s lower courts, but Zap is appealing the case to the California Supreme Court.

Daimler vs. Ovonics vs. Japanese Battery Makers

Mercedes S400 Hybrid

Mercedes S400 Hybrid.

Ovonics Battery Company, a subsidiary of Energy Conversion Devices that eventually became Cobasys, filed lawsuits in 2001 against Matsushita Battery Industrial Co., Ltd., Toyota Motor Corp., Panasonic EV Energy Co., Ltd., and several related entities for patent infringement on its nickel metal hydride battery technology. Ovonics won the settlement, but found itself back in legal trouble in 2008, when Daimler AG, maker of Mercedes-Benz luxury cars, sued Cobasys for failing to provide hybrid battery packs as agreed for a planned Mercedes-Benz hybrid.

Boshart Engineering vs. Phoenix Motorcars

Phoenix Motorcars Electric SUT

Phoenix Motorcars all-electric Sport Utility Truck.

For years, Phoenix Motorcars has been planning to sell an all-electric “sport utility truck,” using a Korean-built Ssangyong chassis. The company promises to deliver an electric SUV soon afterward. The company cut its ties with its motor supplier and engineering firm, Boshart Engineering. Boshart then sued Phoenix for reneging on its contract.

Toyota vs. Paice LLC

Toyota Prius

Toyota Prius.

In May 2008, the US Supreme Court allowed a lower court’s ruling to stand which awards Paice LLC roughly $4.3 million in a patent lawsuit related to Toyota’s use of a microprocessor, which communicates information from the electric motor and internal combustion engine. Two other hybrid lawsuits with Toyota are pending, including one with Conrad Gardner, a 75-year-old Seattle-based engineer who filed a hybrid patent in the early 1990s. Gardner sued Toyota to, in his words, “to teach them a lesson to respect the patents of others.”

New York Taxicab Board vs. City of New York

Ford Escape Hybrid Taxi

Fisker Karma plug-in hybrid.

The Metropolitan Taxicab Board of Trade filed a suit against the City of New York claiming that Ford Escapes Hybrids mandated for use as taxis in the city were “unsafe” because they aren’t designed to be used as cabs.

Detroit vs. California

Crushed EV1s

Crushed EV1s.

The biggest and most consequential lawsuits have been, and continue to be, filed by the big auto companies. In 2003, General Motors, DaimlerChrysler and Izusu Motors fought the State of California over its zero emission vehicle mandate, claiming it was an end run on the federal role of setting vehicle fuel economy standards. That one was settled out of court—but it led to the infamous “killing of the electric car.” Battles over emissions between Detroit, the State of California, and the federal government, continue to this day.

Lawsuits are so much a part of the landscape that the California Air Resources Board, the agency behind the zero emission vehicle mandate and many other regulations, has a standing item on its monthly agenda to discuss the status of various suits brought against it by the auto industry.

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  • Shines

    I’m not sure whether to laugh or cry.

    I guess this is human nature.

    One thing’s for sure, the lawyers are making money…

  • Anonymous

    This does suck. One of the issues I have with the legal system, or any bureaucracy.. is that the people who decide what services are rendered are the same ones who get the money for said services.. I understand I’m voicing a philosophical rant. But, in engineering, if you don’t like a computer, you don’t buy it. You don’t go to the computer store, and they TELL you to fork over the money. No money is exchanged until that product is “good”.

    However, Lawyers have a clear incentive to continue doing things like this, not finding better ways. And, I do put it on their collective character that they are doing this.. instead of finding ways for people to just get on with solving problems.

  • Samie

    Not sure I blame the lawyers here. This happens in every developing industry example Bill Gates taking Zerox and Apple technologies and applying it to Dos and Windows. Same thing but legal issues will continue to happen as the industry tries to build on technological innovations.

    As for the auto industry in general they spend billions each year fighting regulations and lobbying boards like the one in California. Clearly shameful waste of money but I guess some were so fixated on needing to sell high end vehicles. Maybe restructuring to profit from smaller cars was way over due for some of these companies.

  • RKRB

    -Yes, law and efficiency make strange bedfellows.
    -Speaking of which, it’s worth noting the Sierra Club has strongly (and successfully) lobbied for years against diesel cars, even the cleaner ones. They have done so at the cost of using more and more oil over that time, and of denying Americans access to European-style energy efficiency (and I’d like to see some hard data suggesting how Europeans have suffered because of it). BTW, I have been a life member of Sierra Club for over 10 years.
    Looks like people may be wondering (again) Who Killed The Electric Car, and it’s worth noting who helped kill (or delay) the diesel, too.

  • ACAGal

    Sorry, but out here in So CA the universities of UCLA, USC, UCI and others have done studies on the small and ultra fine pollution of diesel, which is now implicated in blood thickening diseases, heart, stroke and lung diseases (the most recent finds trucker have a high rate of lung cancers). Additionally the chemicals in diesels have been implicated in several cancers including leukemia.
    Personally, I hate diesel, because of the mess it makes outside my house, and in (if I dare to open the windows for ventilation). My next door neighbor has diesel. Like coal, I don’t believe clean diesel is possible…cleaner than it now is, maybe, but never clean. I have been to Europe, but they have pollution and green house gas issues because of shipping, auto and air fuels. Their trains operate on electric/electric-diesel systems. They are cleaner than US trains.

  • RKRB

    -ACAGal raises a valid point: research indicates diesels generate unhealthy levels of particulates (along with many other pollutants, just like any engine), and diesels produce particulates at higher levels than gas engines. The point, while compelling, is not conclusive evidence that diesels should be abandoned (just like current evidence suggesting “cell phones cause cancer” mean cell phones must be tossed — yet — much as we’d like to do this sometimes). Several questions must be considered, among them:
    –what are the relative and absolute risks of exposure, and can it be generalized across the population or only to certain populations with controllable risk factors? What are the morbidity/mortality figures, are they location- or dose-dependent, etc.?
    –what epidemiological or in vivo evidence backs up this research?
    –are there any good meta-analyses of this question (although meta-analyses can be just as defective as any other study)?
    –what are diesel’s risks compared with gas, and does gas have significant relative risk factors too (including gasoline’s neurological toxicity, carcinogenicity of additives, groundwater contamination, higher volatility and flammability, not to mention the high social risks of having to procure the higher quantities of fuel from politically unstable areas and having to “defend” those areas)?
    –what is the contribution of diesel to overall particulate levels with expected numbers of diesels?
    –are cleaner diesels less risky than old-tech diesels?
    –if the risks of diesels (or gas) are indeed somewhat higher than gas (or battery power), should we take steps to outlaw diesel (or gas) engines entirely?
    –indeed, given that our society and civilization uses so much fuel, what actually ARE valid and acceptable risk measures? Who determines them??
    –finally, among the most important questions to ask in evaluating any scientific study: who paid for the research?

    Although all these (and more) questions are controversial, one point has little controversy: diesels are considerably more fuel-efficient than gas engines. We don’t need much research to sort that one out, and it’s right here in front of us.

    It’s a tough question and we don’t have enough data yet, although perhaps the best eventual solution may well be abandoning diesels (or gas). As the article suggests, Americans generally leave these questions to the lawyers. I strongly suspect this question needs considerably more research validation, including epidemiologic studies and good meta-analyses, and our answers may never be complete. I also suspect the search for a riskless fuel source is theoretically possible, but gooood luck. Our best solution surely includes decreasing the use of ANY fuels, but it’s hard to argue conclusively that we should realistically abandon cleaner diesel (or gas) engines. Not yet.

  • Ty

    Ok. So add the Sierra Club to the list of evil doers that should be sent to the worst place in hell.

    ” The perfect is the enemy of the good. “

    They are making it worst in trying to make it better. We WANT better/cleaner vehicles. But #ssholes like the Sierra Club are keeping incrementally better/cleaner vehicles off the market until the ‘perfect’ vehicle is offered. This has been going on for a while now and looks to continue for the next 10 to 20 years. I would LOVE to buy a diesel people mover that gets 62.8 mpg. ( Honda makes one. ) But Cal. and CARB say I can’t buy one. And I don’t even live in the state!! So I’m stuck with my ‘someteen’ mpg SUV until something better comes along. So all you SUV haters out them – here’s the bird ! – Your keeping everything better off the market!

  • ford f-150 parts

    Electric cars really is the way to go. Especially now that the price of gas is unstable in the market. I think it is the wisest option.