Two major South Korean electric vehicle battery manufacturers said they settled a long-running trade dispute that will enable one company to step forward with plans to produce batteries in Georgia. WASHINGTON — Two major South Korean electric vehicle battery makers said Sunday they settled a long-running trade dispute that will allow one company to step forward with plans to produce batteries in Georgia. President Joe Biden called it “a victory for American employees and the car industry.
“The agreement between LG Energy Solution and SK Innovation ended Biden’s need to intervene in a case closely watched for its effects on Biden’s clean-energy agenda, including a sharp rise in the number of electric vehicles as part of his climate change strategy. Biden had a decision until Sunday night, following a trade commission ruling in February.
The companies said SK would have a total of $1.8 billion and an undisclosed royalty in a joint statement. They decided to drop all existing trade disputes in the U.S. and South Korea, and not claim new lawsuits for 10 years.
“We have agreed to settle and compete, all for the future of the U.S. and South Korean electric vehicle battery industries,” said Jun Kim, CEO and Chairman of SK, and Jong Hyun Kim, CEO, and Chairman of LG Energy.
The companies vowed to work together to improve the U.S. EV battery supply chain and support Biden’s efforts to promote renewable energy policies, including electric vehicles.
In February, the U.S. International Trade Commission ruled that SK stole 22 trade secrets from LG Energy and that SK should be banned from importing, manufacturing or selling batteries in the U.S. for 10 years.
The decision may have left Ford and Volkswagen searching for batteries as they both roll out additional versions of electric vehicles, a priority for companies and the Biden administration. SK has contracts for an electric Ford F-150 pickup truck and an electric Volkswagen SUV.
The commission said SK could supply batteries for four years to Ford Motor Co. and two years to Volkswagen AG. The decision jeopardised a $2.6 billion battery factory built by SK in Commerce, Georgia.
Democratic Sen. Jon Ossoff of Georgia, who had jump-started talks between the two companies at Biden’s request, said the settlement “has saved the battery plant in Commerce, Georgia, guaranteeing thousands of jobs, billions in potential investment, and Georgia will be a pioneer in electric vehicle battery production for years to come.”
Trade Representative Katherine Tai said the agreement “builds confidence” in both companies’ reliability and obligation as U.S. auto suppliers. The agreement places the U.S. “in a better position to accelerate innovation and… renewable energy technologies while respecting the interests of technology innovators at the core of trade and production policy,” Tai said.
Added Sen. Raphael Warnock, D-Ga.: “The only way to protect trade workers—and Georgian jobs were promised—is for the businesses involved to reach a settlement in good faith.” He said he addressed Biden’s battery problem during the president’s March 19 visit to Atlanta.
Biden said in a statement that constructing electric cars and batteries is an integral aspect of his $2.3 trillion infrastructure strategy.
“We need a solid, diversified and resilient U.S.-based electric vehicle battery supply chain, so we can supply the rising global demand for these vehicles and components—creating good-paid jobs here at home and laying the foundation for tomorrow’s jobs. Today’s settlement is a positive step in that direction. “
Gov. Brian Kemp, R-Ga., called the settlement “fantastic news for northeast Georgia and the growing electric vehicle industry in our state.”
In a statement, Ford said the agreement “allows us to concentrate on providing a variety of world-class Ford battery electric vehicles for our retail and fleet customers, while helping American employees, the environment, and our common objective of protecting the earth.”
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