LG Energy Solution and SK Innovation have reached an agreement that will enable one company to step forward with plans to produce batteries in Georgia. ‘A victory for American workers,’ said the US President Joe Biden.
Two major South Korean electric vehicle battery manufacturers announced on Sunday that they had reached an agreement to end a long-running trade dispute, allowing one firm to proceed with plans to produce batteries in Georgia. “A victory for American employees and the American auto industry,” said the US President, Joe Biden.
The agreement between LG Energy Solution and SK Innovation eliminated the need for Biden to interfere in a case that had been closely watched for its effects on Biden’s clean-energy agenda, which requires a significant rise in the number of electric vehicles as part of his climate-change strategy. Following a February ruling by a trade tribunal, Biden had until Sunday night to make a decision.
In a joint statement, the companies said SK would pay LG Energy a total of USD 1.8 billion plus an unspecified royalty. They decided to drop all existing trade disputes between the US and South Korea, and not make any new claims for the next ten years.
“For the future of the US and South Korean electric vehicle battery industries, we have agreed to settle and compete in a friendly manner,” said Jun Kim, CEO and president of SK, and Jong Hyun Kim, CEO and president of LG Energy.
The companies agreed to collaborate to improve the US EV battery supply chain and to help the President Joe Biden’s efforts to promote renewable energy policies, including electric vehicles.
In February, the US International Trade Commission ruled that SK stole 22 trade secrets from LG Energy and that the company should be banned from importing, manufacturing, or selling batteries in the US for ten years.
The decision may have forced Ford and Volkswagen to scramble for batteries as they prepare to launch new electric vehicle models, which are a priority for both the companies and the Biden administration. Batteries for an electric Ford F-150 pickup truck and an electric Volkswagen SUV have been contracted to SK.
According to the commission, SK should supply Ford Motor Co. with batteries for four years and Volkswagen AG with batteries for two years. The decision had placed SK’s USD 2.6 billion battery factory in Commerce, Georgia, in danger.
The deal “has saved the battery plant in Commerce, Georgia, guaranteeing thousands of jobs, billions in potential investment, and that Georgia will be a pioneer in electric vehicle battery manufacturing for years to come,” said Democratic Sen. Jon Ossoff of Georgia, who had jumped-started talks between two companies at Biden’s request.
