S. Korean battery makers agree $1.8b. settlement, aiding Biden’s EV push

WASHINGTON/SEOUL (Reuters) – South Korean battery makers LG Energy Solution and SK Innovation Co. on Sunday agreed to settle disputes over trade secrets, avoiding a potential setback for US electric-vehicle (EV) ambitions.

The settlement by affiliates of two of South Korea’s biggest conglomerates came hours before a Sunday deadline for the administration of President Joe Biden to decide whether to take the rare step of reversing a US International Trade Commission (ITC) decision.

The core dispute had threatened the EV plans of Ford and Volkswagen, as well as a Georgia plant that is key to the growing industry.

The resolution is a win for Biden, who has made boosting EVs and US battery production a top priority. The global auto industry is racing to develop EVs, and Biden has proposed spending $174 billion to hike their sales and expand charging infrastructure.

SK Innovation agreed to pay LG Energy Solution, a wholly owned subsidiary of LG Chem Ltd., 2$1.8b. in cash and royalties. The companies agreed to drop all litigation in the US and South Korea and not raise further lawsuits against each other for 10 years.

“The two companies now can coexist in the global market and compete in good faith,” LG Energy Solution said in a statement. SK said it would invest actively both in South Korea and abroad now that uncertainties for its EV battery business in the United States have been dissolved.

Biden’s Office of US Trade Representative faced a Sunday night deadline on whether to take the rare step of reversing a US International Trade Commission decision unless the companies had agreed on a deal.

The administration, Volkswagen and Ford had been pushing the Korean companies to settle, sources told Reuters.

Trade Representative Katherine Tai was personally involved in the settlement discussions, urging the companies to come to a resolution, the sources said. Her office declined to comment before the agreement was announced during the day.

Ford and Volkswagen were not immediately available for comment outside of business hours.

In the bitter two-year dispute, LG lost to SK in a bid for VW orders, then accused SK of stealing trade secrets by poaching nearly 80 of its employees. LG filed a complaint against SK in 2019, and both sides hired numerous lawyers and consultants to make their case to the Biden administration.