WASHINGTON: Two big South Korean electric vehicle battery makers said on Sunday they have settled a long-running trade dispute that will allow one company to move ahead with plans to manufacture batteries in Georgia. President Joe Biden called it “a win for American workers and the American auto industry.”
The agreement between LG Energy Solution and SK Innovation ended the need for Biden to intervene. He had until Sunday night to make a decision, following a ruling in February by a trade commission.
The companies said in a joint statement that SK will provide LG Energy with a total of $1.8 billion and an undisclosed royalty. They agreed to withdraw all pending trade disputes in the US and South Korea and not assert new claims for 10 years.
“We have decided to settle and to compete in an amicable way, all for the future of the US and South Korean electric vehicle battery industries,” said Jun Kim, CEO and president of SK, and Jong Hyun Kim, CEO and president of LG Energy.
The companies pledged to work together to strengthen the EV battery supply chain in the US and support the Biden administration’s efforts to advance clean energy policies, including electric vehicles.
The US International Trade Commission had decided in February that SK stole 22 trade secrets from LG Energy, and that SK should be barred from importing, making or selling batteries in the US for 10 years.
The decision could have left Ford and Volkswagen scrambling for batteries as they both roll out additional electric vehicle models, a priority for the companies and for the Biden administration, as it moves to address climate change. SK has contracts to make batteries for an electric Ford F-150 pickup truck and an electric Volkswagen SUV.
The commission said SK could supply batteries to Ford Motor Co. for four years and to Volkswagen AG for two years. The decision had jeopardized a $2.6 billion battery factory that SK is building in Commerce, Georgia.
Democratic Sen. Jon Ossoff of Georgia, who at Biden’s request had started negotiations between two companies, said the settlement “has saved the battery plant in Commerce, Georgia, ensuring thousands of jobs, billions in future investment, and that Georgia will be a leader in electric vehicle battery production for years to come.’” US Trade Representative Katherine Tai said the deal “builds confidence” in the reliability and responsibility of the two companies as suppliers to the US auto industry.
With the agreement, the US now is “in a stronger position to drive innovation and growth of clean energy technology” envisioned in Biden’s infrastructure plan “while also respecting the rights of technology innovators at the heart of trade and manufacturing policy,” Tai said.
Biden said in a statement that building electric vehicles and the batteries needed for them is an important part of his $2.3 trillion infrastructure plan.
