WASHINGTON (Reuters) – South Korean battery makers LG Chem and rival SK Innovation Co have agreed to a trade secret dispute that threatened a key Georgian plant and electric vehicle plans for Ford Motor Co and Volkswagen AG, three sources on the matter said.
The Biden administration, through the US Trade Representative’s Office (USTR), faced a deadline on Sunday night on the possibility of taking the rare step of revoking a decision by the International Trade Commission, unless the companies agreed an agreement. An announcement regarding the solution of the battery manufacturers is expected soon, the sources said.
The deal is a win-win for President Joe Biden, who has made growing electric vehicles and battery production in the US a priority. The global auto industry is struggling to develop electric vehicles, and Biden has proposed spending $ 174 billion to increase electric vehicle sales and expand charging infrastructure.
ITC took part in LG Chem in February after the company accused SK of hijacking trade secrets related to EV battery technology and issued a 10-year import ban, but allowed SK to import battery components for the Ford F program. -150 EV for four people. for two years and North American electric vehicles Volkswagen for two years.
SK has promised to move away from the $ 2.6 billion construction plant in Georgia if the ITC decision is not overturned.
ITC also blamed what it called SK’s “huge deviations” and SK’s destruction of documents ordered by the company’s directors.
Ford, VW, LG and SK declined to comment.
Volkswagen of America CEO Scott Keogh wrote in a LinkedIn post on Wednesday that if the ITC decision were left in effect, it could “reduce US battery capacity and delay the transition to electric vehicles.”
LG first filed a lawsuit against SK in 2019 and both parties have hired numerous lawyers and consultants to present their case to the Biden administration.
The administration pushed the two companies to try to reach an agreement, just like VW and Ford, the sources said.
U.S. Sales Representative Katherine Tai was personally involved in the settlement talks and urged both companies to reach a resolution, sources said. USTR declined to comment.
SK received the proposed terms from LG in March, including financial reparations to resolve LG’s misappropriation requests, Reuters previously reported, citing a person familiar with the situation.
Georgia is home to two newly elected U.S. Democratic senators, who are a key part of the weak majority in the Biden Congress, and they both talked about the importance of securing the future of the Georgia plant.
LG battery unit LG Energy Solution is nearing the completion of an Ohio cell manufacturing plant with General Motors and is close to announcing plans to build a $ 2.3 billion unit in Tennessee, sources told Reuters.
LG has said it can meet the battery needs of automakers if SK abandons the Georgia plant.
SK said LG could not handle the VW and Ford contracts and that Chinese manufacturers could intervene to meet demand.
Bloomberg reported the deal expected Saturday earlier.
Reporting by David Shepardson and Hyunjoo Jin; Edited by Daniel Wallis