Tesla Inc (TSLA) and Nio Inc (NIO) battery supplier Contemporary Amperex Technology Co or CATL has sued rival China Lithium Battery Technology Co (CALB) for alleged intellectual property violations, Reuters reported Wednesday.

What Happened: CATL has reportedly alleged in the lawsuit that batteries installed in tens of thousands of vehicles by CALB use its technologies.

The lawsuit was filed in Fuzhou, near the company’s headquarters in Ningde in China’s Fujian province, as per Reuters.

CALB — a supplier to China’s GAC Group — denied the allegations to Reuters and said it focused on independent research and technology advancement.

The company said its batteries have been assessed to ensure they do not violate the intellectual property rights of others.

Why It Matters: Last month, Tesla signed an expanded long-term battery supply agreement with CATL which extends their partnership until December 2025.

CATL was reported to be planning a new EV battery plant in Shanghai. The plant’s capacity is said to be 80 gigawatts-hours of battery cells a year, as per a Reuters report.

CATL Chair Robin Zeng surpassed Alibaba Group Holding Ltd (BABA) co-founder Jack Ma on the Forbes real-time billionaires list earlier this month. 

At press time, Zeng was ranked number 26 with a net worth of $48.7 billion while Ma was ranked 28 with a net worth of $46 billion.

Price Action: On Wednesday, Tesla shares closed 0.79% lower at $655.29 in the regular session and fell almost 0.6% lower in the after-hours trading. On the same day, Nio shares spiked 5.89% in the regular session to $46.77 and rose nearly 0.8% in the after-hours session.