Former Apple engineer Xiaolang Zhang, who was charged with stealing autonomous car trade secrets, pleaded not guilty in federal court in San Jose, California this week. Zhang is presumed to have been attempting to transfer the stolen information to his new employer XMotors, a Chinese electric and driverless vehicle startup.

The plea was entered through his lawyer Daniel Olmos on Monday. Olmos took over from provisionally appointed federal public defender Tamara Crepet who told the judge Zhang made too much money to be represented by her office.

A single count of trade-secret theft

Zhang is currently facing a single count of trade-secret theft. The engineer was previously granted release by U.S. Magistrate Judge Virginia K. DeMarchi and is currently working to secure bail of $300,000.

However, prosecutor Matt Parrella said the ex-Apple employee may now receive up to 10 years in prison and a $250,000 fine if found guilty. Zhang first came under suspicion when he turned in his two Apple-issued iPhones and his laptop to the firm's tech security team who noticed an inordinate amount of download activity.

In addition, security cameras caught Zhang at the Apple campus labs during his paternity leave against corporate policy regulations. Prosecutors said Zhang admitted to the Federal Bureau of Investigation (FBI) on June 27 that he had also downloaded Apple's proprietary files to his wife’s laptop.

Authorities who examined his wife's computer said about 60% of the data was “highly problematic.” Zhang was then arrested at the airport on July 7 before boarding a flight to China and is said to have surrendered without incident.

XMotors not involved

Zhang's new employer XMotors has sought to distance itself from the case. In a statement released last Wednesday, the firm said it is cooperating with authorities but that it was “not involved in any form” in the alleged theft.

The Chinese company said it had no indication that the ex-Apple employee ever communicated any sensitive data and upon being informed about the investigation it “sealed Zhang’s computer and belongings at the office as required.” The company said it strictly abides by the intellectual property laws of China and the US.

Last December, China’s economic planning agency, the National Development and Reform Commission, unveiled a plan to make the development of smart cars a national priority that has sent local car makers into a frenzy. However, current data indicate that China is still lagging far behind the US in autonomous vehicles.

Meanwhile, the industry itself has also become increasingly competitive. Alphabet recently filed a lawsuit against Uber for self-driving car trade secret thefts while Baidu sued its former senior vice president over similar charges.

Apple’s autonomous car project is said to have been launched to take on Tesla while the latter is also currently suing an ex-employee for trade secrets theft.