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Apple in settlement talks with electric-car battery maker

Lawsuit accused Apple of luring away key engineers to work within a new battery division, fueling speculation that the iPhone maker has ambitions of developing an electric car of its own.

Apple filing indicates the iPhone maker seeks to settle the lawsuit. James Martin/CNET

Apple is in talks to settle a lawsuit brought by an electric-car battery maker that accuses the iPhone maker of poaching key engineers to work with a new battery division.

A123 Systems filed a lawsuit last month in Massachusetts federal court against Apple and five of its former employees now working there. The suit charges that Apple conducted an "aggressive campaign" last year to recruit employees who performed critical development and testing activities. The lawsuit appeared to provide further evidence that the iPhone maker is aiming to develop an electric car.

On Tuesday, Apple filed a motion requesting more time to respond to the lawsuit, saying that it is "exploring potential resolution of this matter with plaintiff."

Representatives for Apple and A123 Systems did not immediately respond to a request for comment.

A123 Systems, which develops energy storage systems for a variety of commercial and industrial applications, including "advanced energy storage for electric-drive vehicles," fueled speculation that Apple was developing an electric car when it claimed in its lawsuit that "Apple is currently developing a large-scale battery division to compete in the very same field as A123." A123 Systems boasts that it has built more lithium-ion hybrid systems for transit buses than any other manufacturer in the world.

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The five employees named in the lawsuit were hired to perform the same functions at Apple, in violation of noncompete and nondisclosure agreements signed by the employees, according to A123's complaint. While noncompete clauses are legally unenforceable in many states, the laws in Massachusetts -- where A123 Systems filed the lawsuit -- allow for such agreements.

Rumors started swirling last month that Apple is creating a team charged with designing an electric car to take on Tesla and others. Apple has not commented, but several rumors have cropped up that Apple has hired people from the automotive industry and seems poised to build an electric vehicle that may or may not drive itself. Technologies like those developed by A123 Systems would be key to getting an electric-car effort on the road.

Apple is pushing its development team to have the car ready for production as early as 2020, Bloomberg reported last month, citing unidentified sources described as having knowledge of the matter. The team, which is said to have about 200 employees, has been growing in recent months and now includes experts in technologies such as batteries and robotics, the news agency reported.