Tesla TSLA and Rivian RIVN have been involved in a legal battle for four years, wherein Tesla accused Rivian of stealing battery technology by hiring former Tesla employees. It now seems the two automakers are nearing a settlement. 

Per Bloomberg, Tesla informed a California state judge that it plans to seek dismissal of the case by Dec. 24, 2024, provided the settlement terms are satisfactorily met. However, the details of the agreement remain undisclosed.

The lawsuit began in 2020 when Tesla alleged that Rivian had stolen trade secrets by recruiting former employees and encouraging them to bring documents. Rivian denied the accusations. At the time, Tesla did not specify which trade secrets were allegedly stolen. The employees listed in the lawsuit involved two recruiters, an Environmental Health and Safety (EHS) manager and a Tesla charging networks manager. Per Tesla, these employees took highly sensitive trade secrets, confidential materials and proprietary information with them when they joined Rivian.

In 2021, Tesla expanded the lawsuit, accusing Rivian of targeting core technology related to its next-generation batteries. Initial attempts to settle the dispute out of court were unsuccessful, leading to the case proceeding to trial last year. Rivian countered Tesla’s claims, arguing that the lawsuit was a malicious attempt to hinder its progress and sought to dismiss the case.

While Tesla has previously promoted open-sourcing its patents, it has clarified that its policy allows other companies to use its patented technology only if they agree not to sue Tesla over patent rights. Neither automaker has commented on the reported settlement.

Tesla and Rivian’s Zacks Rank & Key Picks

TSLA currently sports a Zacks Rank #1 (Strong Buy) while RIVN carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the auto space are Dorman Products, Inc. DORM and BYD Company Limited BYDDY, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved by 75 cents and 88 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 25.07% and 31.51%, respectively. EPS estimates for 2024 and 2025 have improved by 35 cents and 39 cents, respectively, in the past 30 days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

Dorman Products, Inc. (DORM) : Free Stock Analysis Report

Byd Co., Ltd. (BYDDY) : Free Stock Analysis Report

Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research