(ATF) Two of the world's largest electric vehicle (EV) battery makers have settled a trade secrets dispute that threatened to upend plans by Ford and Volkswagen, among other carmakers, and throw a spanner in the works of US President Joe Biden's clean energy policy.
LG Chem had won a bitter US International Trade Commission (ITC) case against its South Korean rival SK Innovation, but Washington was poised to reverse the ruling after SK vowed to terminate a multibillion dollar battery manufacturing investment in the electorally significant US state of Georgia.
The settlement met a Sunday night deadline, after which the Biden administration would have had to make a ruling if the companies failed to reach a deal.
"This settlement agreement is a win for American workers and the American auto industry," the president said on Sunday. Biden has made boosting electric vehicles and US battery production a top priority.
The global automotive industry is racing to develop EVs, and Washington has proposed spending $174 billion to encourage EV sales and expand charging infrastructure.
The accord also puts an end to a two-year dispute between affiliates of two of South Korea's biggest conglomerates. After losing to SK in its bid to win Volkswagen orders, LG accused SK of stealing trade secrets by poaching nearly 80 of its employees.
The ITC in February sided with LG Chem after the company accused SK of misappropriating trade secrets related to EV battery technology and issued a 10-year-import ban, but it allowed SK to import components for batteries for Ford's EV F-150 program for four years, and Volkswagen's North American EVs for two years.
SK vowed to walk away from its $2.6 billion Georgia battery plant under construction if the ITC decision was not overturned.
The two companies are among four - along with CATL and Panasonic - that dominate global EV battery production "We estimate these four companies accounted for more than half of global EV battery production in 2020," said Motoki Yanase, Tokyo-based senior credit officer at Moody's, the rating agency.
The settlement also clears the air for SK Innovation's plans for an initial public offering of its 90%-owned subsidiary SK IE Technology, which produces separators for lithium ion batteries as well as flexible cover windows for foldable smartphones.
With reporting by Reuters