President Moon Jae-in quickly congratulated President-elect Joe Biden last week following his projected victory over Donald Trump in the 2020 General Election. In his November
Two Korean Titans Settle Automotive Battery Dispute, Now Back on Track for U.S. Jobs and Investments
A long-running battle between two Korean battery manufacturers over trade secrets has been settled, and the result will be new investments and jobs in the U.S. and a boost to the electric vehicle industry. The agreement, between SK Innovation and LE Energy Solution, avoids a lengthy legal appeal and will be a catalyst for President Biden’s ambitious clean energy plans.
The settlement brings to a conclusion a dispute over trade secrets that had reached the International Trade Commission. In February, the ITC ruled that SK had stolen 22 trade secrets from LG Energy, and recommended that SK be barred from importing, making, or selling batteries in the U.S. for 10 years. However, that decision would have had a severe impact on SK contracts to produce lithium batteries for both Volkswagen and Ford electric vehicles, leaving those manufacturers without a source of batteries.
It also threatened a new battery factory that SK is building in Commerce, Georgia, which sits 45 minutes northeast from Atlanta. That $2.6 billion plant is expected to create 2,600 new full-time jobs.
The settlement allows both companies to withdraw all pending trade disagreements in the United States and in South Korea, and requires that they not assert any new claims for 10 years, while SK will pay LG Energy $1.8 billion in damages as well as royalties. In addition, the two companies pledged to cooperate on efforts to strengthen the electric vehicle battery supply chain in the U.S.
“We have decided to settled and to compete in an amicable way, all for the future of the U.S. and South Korean electric vehicle battery industries,” the two companies stated in a press release attributed to SK President and CEO Jun Kim and LG Energy President and CEO Jong Hyun Kim.
For his part, President Biden praised the settlement, calling the need for electric vehicles and the batteries that fuel them as a key component of his infrastructure plans.
“We need a strong, diversified and resilient U.S.-based electric vehicle battery supply chain, so we can supply the growing global demand for these vehicles and components — creating good-paying jobs here at home, and laying the groundwork for the jobs of tomorrow. Today’s settlement is a positive step in that direction,” Biden said about the agreement.
Had the two rivals not reached a settlement, the dispute could have been tied up in federal courts for years, delaying the launch of the new Georgia factory and significantly hampering battery production capacity. Because of the high stakes, top U.S. and Korean trade officials as well as the newly elected Senators from Georgia became involved in the negotiations and helped facilitate the settlement.