Two South Korean electric vehicle battery manufacturers who are building plants in the US announced on Sunday that they had reached a $ 1.8 billion deal in a trade secret dispute that threatened domestic battery supplies and thus the Biden government’s green agenda. Dollars.
The announcement came on the day of a deadline set by the United States sales representative to determine whether to veto an International Trade Commission decision in the intellectual property case between LG Energy Solution and SK Innovation. The Commission’s decision in favor of LG threatened SK with a ban on the supply of batteries in the country and put the facility under construction in Georgia at risk.
The facility, which is under construction, will supply batteries for electric vehicles for Ford and Volkswagen, and the settlement agreement allows SK to do business with other companies.
The dispute had threatened the domestic supply of batteries for electric vehicles. The deal avoids delays in the development of American electric vehicles and deliveries.
Georgian politicians, both Democrats and Republicans, had pressured President Biden to act on behalf of their state. Governor Brian Kemp, a Republican, wrote to the president last month asking him to veto the commission’s decision to protect the Georgian economy and the thousands of jobs that would be created at the battery plant.
“I congratulate both companies on working through their significant differences in resolving this dispute, which increases confidence in their reliability and responsibility as a supplier to the US auto industry,” said Sales Representative Katherine Tai in a settlement statement.
President Biden called the settlement agreement “a win for American workers and the American auto industry” in a statement on Sunday. “An integral part of my plan to rebuild better is to have American workers across America build the electric vehicles and batteries of the future here in America.”
Officials from Ms. Tai’s office and elsewhere in the Biden administration met with the companies in hopes of promoting a deal. Senator Jon Ossoff, Democrat of Georgia, had also worked “intensively” on the mediation, as DealBook reported on Friday.
“A week ago, talks between these companies stalled and 2,600 jobs in Georgia were at risk,” Ossoff said in a statement. The deal, he said, will secure “thousands of jobs, billions in future investment and that Georgia will be a leader in the production of batteries for electric vehicles in the years to come”.
Under their agreement, SK Innovation will provide LG Energy Solution with flat-rate fees and royalties totaling 2 trillion won ($ 1.8 billion). You have also agreed to withdraw all pending disputes in the US and Korea and not to bring any new claims for the next 10 years.
In 2013, the Obama administration vetoed a decision by the International Trade Commission in a dispute between Apple and Samsung on grounds of public interest. Such disapproval is rare, however, and the settlement saved the Biden government from taking a stand. LG is building a plant in Ohio to supply batteries for General Motors electric vehicles, and Ohio Governor Mike DeWine, a Republican, also wrote to President Biden last month about the dispute, urging the president not to veto the decision SK should not be allowed to benefit from “intellectual property stolen” against its government employees.
The trade commission’s decision would have excluded SK from the domestic American market and enabled the company to fulfill existing contracts with Ford and Volkswagen. However, the Commerce, Georgia facility is still under construction and SK was reluctant to continue building it as it could not do additional business.
LG countered that SK had overestimated its importance to the domestic battery supply and suggested that another company would buy the Georgia plant if SK abandoned it. Disruption of plans in Georgia, however, could have been a problem for American automakers and the government as international battery supplies for electric vehicles are already tight and government plans to move to green energy are based on expanding the use and production of electric vehicles .
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