The Biden administration avoided one of the most difficult early tests of its climate agenda on Saturday, when two South Korean battery giants clashing over trade secrets reached an agreement to keep a fabulous Georgia complex open, according to sources. familiar with the negotiations.
The White House faced a deadline on Sunday to decide whether to veto a February International Trade Commission decision banning SK Innovation from importing materials needed to build batteries for electric vehicles at a pair of 2.6 billion plants. of dollars from Commerce, Georgia.
The case illustrates the new administration’s dueling priorities as it seeks to begin efforts to eliminate global warming pollution from the US economy, while confronting China over intellectual property protection.
On Friday night, the company appeared far from an agreement with Seoul rival LG Energy Solutions, which convinced the federal commercial court that SK Innovation had destroyed the evidence of the stolen trade secrets. In February, ITC imposed a 10-year ban on imports of SK Innovation, endangering the supply of batteries for the Ford F-150 electric pickup and Volkswagen’s Crossover series and threatening the company’s 2,600 jobs. to occupy them in Georgia for the next few years.
The ruling also risks delaying President Joe Biden’s plans to electrify 276 million domestic cars, the main source of climate pollution in the United States.
The agreement will put an end to other ongoing US trials between the two companies, including one in a federal court in Delaware, which was on hold until the ITC saga came to an end.
The SK Innovation plant will comprise more than 35% of US electric vehicle battery production capacity by the end of Biden’s first term, when the country is expected to have about 11 large online package manufacturing plants.
SK Innovation A 2020 aerial photo of the SK Battery America site in Commerce, Georgia, shows construction already underway.
This would probably force carmakers to rely more on batteries made in China, which in turn builds about 100 battery factories.
The agreement, details of which were set to be revealed on Saturday morning, is likely to help reverse the ruling and allow SK Innovation to keep its plant open.
The agreement is a political victory. Leaders across the partisan spectrum pressed for a result that would allow the plant to remain open. Georgia Governor Brian Kemp (R) has pleaded with Biden to veto the decision if no agreement is reached. In recent weeks, Senator Jon Ossoff (D-Ga.) Has held at least one meeting in search of an intermediary.
But in the end, the deadline and high stakes of a decision that should define the future of a US set for near-exponential growth over the next decade led to an eleven-hour deal.
The loss of the factory without a deal or a veto would have given a boost to the US battery market, as it seems to start attracting more players, said Caspar Rawles, an analyst at Benchmark Mineral Intelligence, a London-based research firm specializing in lithium-ion batteries. and supply chains for electric vehicles.
“The message you send to those companies by essentially closing a US plant for legal reasons does not send a good message,” he said before announcing the transaction. “It’s not the most rewarding investment environment for someone who wants to spend a few billion dollars, and then there’s a risk that something will happen and there will be legal intervention and lose everything.”
A presidential veto would have been a rare move. The last time power was used was in 2013, when President Barack Obama blocked an ITC ruling that would have prevented Apple from importing some iPads. Ronald Reagan set the record by vetoing four ITC decisions, including one that coincidentally dealt with batteries.
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