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Nikola files a $2 billion lawsuit against Tesla for patent infringement

Nikola, an upstart electric truck manufacturer, has settled a $2 billion patent infringement lawsuit against Tesla, alleging that the larger, more established rival stole portions of Nikola's design for a heavy duty truck.

The lawsuit was originally filed in 2018, while Tesla continued to lose money, was cash-strapped, and its stock was struggling. Nikola was a hot start-up at the time, promising hydrogen-powered semi-trucks and pickup trucks and boasting a sizable order book.

Tesla has since transitioned from perpetual loss to profit, and now commands a market capitalization of more than $1 trillion. It is more valuable than the world's 12 largest automobile manufacturers combined.

Tesla filed a countersuit in response to Nikola's suit. The two companies agreed to drop their lawsuits against one another as part of a settlement agreement.

Tesla has yet to release its own semi-truck, despite assurances that it is close to completion. Last year, it increased its car and SUV sales by 87 percent, while other automakers struggled to find the computer chips and other components necessary to build vehicles and meet demand.

Tesla was originally accused of stealing Nikola's patented designs for a wrap-around windshield and cab doors, which were intended to reduce wind resistance and increase the truck's range in either its battery-electric or hydrogen fuel cell configurations. It stated that Tesla did not begin developing its own truck plans until after seeing a concept version of Nikola's truck in 2016, and that Tesla's stock increased by $2 billion shortly after the company announced plans for its own semi-truck.

Nikola's 2018 lawsuit asserted that it had secured significant contracts for its planned trucks, but questions about those sales claims were raised in 2020, shortly after the company's shares began trading publicly, about whether Nikola was as far along in bringing its own truck to market as it claimed. It recently delivered its first battery-electric truck to a customer.

Trevor Milton, Nikola's founder and executive chairman, was forced to resign and was indicted last July on federal criminal charges of defrauding investors. He has entered a not-guilty plea to the charges. Nikola agreed last month to pay the Securities and Exchange Commission $125 million to resolve allegations that the company misled investors.

Nikola's spokesperson stated that the company had no comment on the suit's dismissal. Tesla did not return a message seeking comment.

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