Suit accuses founders of San Antonio-based DeLorean electric car firm of intellectual property theft

The lawsuit comes only months after the startup was awarded nearly $1.1 million in city and county subsides.

click to enlarge The revamped EV maker DeLorean Motors was announced during a Super Bowl commercial earlier this year. - Facebook / DeLorean Motor Company
Facebook / DeLorean Motor Company
The revamped EV maker DeLorean Motors was announced during a Super Bowl commercial earlier this year.
Mere months after the city and county coughed up nearly $1.1 million in incentives to attract the revamped DeLorean Motor Co., the venture has been hit with a lawsuit alleging its founders engaged in intellectual property theft.

A suit filed in federal court in Houston accuses four former employees of California-based electric car maker Karma Automotive of stealing design and engineering information to launch their venture resurrecting the '80s-era DeLorean sports car as an electric vehicle.

In its petition, Karma Automotive maintains that four of its employees were assigned to an initiative dubbed "Project 88," which aimed to electrify the original DeLorean DMC-12 popularized by the Back to the Future film franchise.

The suit names current DeLorean CEO Joost de Vries, Chief Operating Officer Alan Yuan, Chief Marketing Officer Troy Beetz and Vice President Brand and Creative Neilo Harris as those employees and asks the court to stop their use of Karma's technology. The pleading also seeks monetary damages.

While DeLorean officials didn't respond to the Current's request for comment, de Vries did offer the following comment to the San Antonio Express-News, which first reported on the suit: “This car has a very specific, unique DeLorean lineage that has no relation to Karma Automotive from a design, engineering, supply chain or manufacturing perspective. We remain committed to the future of our company.”

The suit accuses de Vries and the three other former Karma employees of hiding information on their plans for the DeLorean from executives while they were still on staff.

"They actively concealed information from Karma to keep Karma from pursing the project or from finding out what [the] individual defendants were doing," the legal filing reads. "Then, one by one, they left Karma."

According to the suit, the defendants conspired to quit Karma Automotive after executives began questioning the viability of the project due to the lack of details provided by the former employees working on the vehicle.

"Within Karma, concerns were raised among Karma's executives that [the] individual defendants' proposals for Project 88 were not sufficiently detailed and raised open questions," the petition reads. "[The] individual defendants repeatedly promised to provide additional details and information, but failed to do so."

Soon after Karma's executives' inquiries, Yuan sent an email to de Vries saying that if  the car was to become a reality, the pair needed to " negotiate on their own," the petition alleges. 

Karma is pursuing its court claim against DeLorean three months after city council awarded the latter company $562,500 to move its headquarters into the Port San Antonio industrial facility. In exchange, DeLorean promised to hit the lofty goal of creating 450 jobs with an average salary of $145,600 by the end of 2026.

Weeks later, the Bexar County Commissioners Court awarded an additional tax subsidy valued at $512,828 over the next decade.

DeLorean previously said that a few vehicles would start rolling off the production line in 2024. Even so, Anjan Hemanth Kumar, an analyst for San Antonio-based market research firm Frost & Sullivan, previously told the Current that the company’s path to profitability would be an uphill battle.

“You need to make hundreds of thousands of cars to achieve profitability, so that’s a huge problem,” Kumar said. “It’s a huge mountain to move.”

Officials with the City of San Antonio and Bexar County Commissioners Court could not be reached for immediate comment on the legal dispute.

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Michael Karlis

Michael Karlis is a Staff Writer at the San Antonio Current. He is a graduate of American University in Washington, D.C., whose work has been featured in Salon, Alternet, Creative Loafing Tampa Bay, Orlando Weekly, NewsBreak, 420 Magazine and Mexico Travel Today. He reports primarily on breaking news, politics...

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