WASHINGTON (Reuters) – International Trade Commission (ITC) joined South Korean chemical and electric vehicle (EV) battery maker LG Chem Ltd on Wednesday in accusing intersection rival SK Innovation Co Ltd by hijacking trade secrets related to EV battery technology.
ITC said it is issuing a limited 10-year exclusion order banning imports into the United States of lithium-ion batteries by SK Innovation, but will allow SK to import components for domestic production of lithium-ion batteries, battery cells , battery modules, and battery packs for Ford Motor Co’s EV F-150 program for four years and for the Volkswagen of America MEB line of electric vehicles for the North American region for two years.
ITC added that SK Innovation can replace or repair its batteries in Kia vehicles sold to US consumers. The move could effectively ban the company from supplying EV batteries in the United States, unless the company can supply all the necessary materials there – a step analysts say is not feasible.
The ITC said the decision would allow carmakers to switch to new suppliers for these programs.
The subsidiary LG Energy Solution, wholly owned by LG Chem, praised the decision.
“SKI’s total non-compliance with intellectual property expectations and rights has given us no choice but to file this case,” Kim Jong-hyun, CEO of LG Energy Solution, said in a statement. He said the company would “further strengthen the protection of intellectual property rights in the future.”
“SK Innovation should stop twisting the situation and humbly accept ITC’s final decision, and we urge (SK Innovation) to take active action to close the process as soon as possible by making responsible proposals,” LG Energy Solution said in -a separate statement.
SK Innovation said in a statement that it regretted the ITC’s decision “but it is a relief that we will continue to supply Ford and Volkswagen”.
SK noted that there was a 60-day presidential review period in which President Joe Biden could decide to overturn the ruling. Biden has made electric vehicles and reducing vehicle emissions an absolute priority.
A White House spokesman declined to comment on the decision.
LG Chem has split its battery business renamed LG Energy Solution, an EV battery supplier for Tesla Inc and General Motors Co. He filed commercial complaints in the US against SK Innovation in April 2019, claiming that his rival stole trade secrets.
It tried to prevent SK from bringing batteries and components to the United States, as well as the manufacturing systems needed for US production, which is scheduled to begin in 2022.
In February 2020, the ITC issued a preliminary ruling in favor of LG Chem, which has since split its battery business under the name LG Energy Solution.
SK Innovation is building two EV battery factories in Georgia to produce batteries for our Volkswagen and Ford electric vehicles. LG Chem has set up a risk unit for EV batteries with GM in Ohio.
“With ITC’s final decision, SK Innovation now faces scenarios in which it could not operate in the United States, which is likely to speed up settlement talks between LG and SK,” said Han Sang-won, an analyst. at Daishin Securities, adding that SK Innovation needs to address the process to better operate its EV battery business.
Ford said that “the ITC decision supports our plans to bring the fully electric Ford F-150 to market by mid-2022.”
“We continue to look at today’s ruling by the US International Trade Commission and its impact on Volkswagen. Regardless, this decision does not change our commitment to produce electric vehicles in Chattanooga, TN in 2022, ”Volkswagen said in a statement.
Volkswagen and Ford have previously warned that a US legal line between South Korean battery manufacturers could disrupt supply of key EV parts and could cost jobs in the US during the COVID-19 pandemic.
Reporting by David Shepardson in Washington and Heekyong Yang in Seoul; Editing by Chris Reese, David Gregorio and Gerry Doyle