WASHINGTON: South Korean battery makers LG Chem and rival SK Innovation have agreed to settle a trade secrets dispute that threatened a key plant in Georgia and Ford Motor and Volkswagen’s electric vehicle projects, three informed sources have said On the question.
The Biden administration, through the Office of the United States Trade Representative (USTR), faced a deadline Sunday (April 11) to decide to take the rare step of overturning a Trade Commission decision international trade unless the companies have reached an agreement. An announcement of the battery manufacturers’ regulation is expected soon, the sources said.
The deal is a victory for President Joe Biden, who has made increasing electric vehicles and battery production in the United States a top priority. The global auto industry is struggling to develop electric vehicles, and Biden has offered to spend US $ 174 billion to increase electric vehicle sales and expand charging infrastructure.
In February, ITC sided with LG Chem after the company accused SK of stealing trade secrets related to EV battery technology and issued a 10-year import ban, but it authorized SK to import battery components for Ford’s F-150 EV program for four. years, and North American electric vehicles from Volkswagen for two years.
SK has vowed to quit its $ 2.6 billion Georgia battery plant under construction if the ITC decision is not overturned.
ITC also criticized what it called SK’s “gross misconduct” and SK’s destruction of documents ordered by company executives.
Ford, VW, LG and SK declined to comment.
Volkswagen of America CEO Scott Keogh wrote in a LinkedIn post on Wednesday that if the ITC decision is left in place, it could “reduce US battery capacity and delay the transition to electric vehicles.” .
LG first filed a lawsuit against SK in 2019, and both sides have hired numerous attorneys and consultants to present their case to the Biden administration.
The administration pushed the two companies to try to reach a settlement, as did VW and Ford, the sources said.
U.S. Trade Representative Katherine Tai was personally involved in the settlement talks and urged the two companies to reach a resolution, sources said. USTR declined to comment.
In March, SK received terms offered by LG, including financial reparations to address allegations of LG’s trade secret misappropriation, Reuters previously reported citing a person familiar with the situation.
Georgia is home to two newly elected U.S. Democratic Senators who are the linchpin of Biden’s slim congressional majority and both spoke about the importance of securing the future of the Georgia plant.
LG’s battery unit LG Energy Solution is nearing completion at a cell manufacturing plant in Ohio with General Motors and is about to announce plans to build a second 2.3 billion US dollars in Tennessee, sources told Reuters.
LG has said it can meet the battery needs of automakers if SK abandons its Georgia plant.
SK said LG couldn’t handle the VW and Ford contracts and Chinese manufacturers could step in to meet demand.
Bloomberg announced the expected deal earlier on Saturday.