LG-SKI settlement ends EV battery spat
Two South Korean electric-vehicle battery makers reached a last-minute settlement in a bitter US trade dispute, sparing President Joe Biden from choosing between undermining intellectual property rights or dealing a politically toxic blow to his climate agenda.
SK Innovation Co agreed to pay two trillion won ($1.8 billion) to LG Energy Solution, a unit of LG Chem Ltd, according to a joint statement.
“The payment is divided equally in cash and royalties,’’ the companies said.
“This settlement should allow SKI to reap the long-term benefit of EV proliferation in the US,” Morgan Stanley analysts said.
The two companies “will work to help the development of EV battery industry in South Korea and the US through healthy competition and friendly cooperation,” according to the joint statement. “In particular, we will work together to strengthen the battery network and environmentally-friendly policy that the Biden administration is pursuing.”
The settlement will avert a 10-year import ban of SK Innovation’s batteries into the US and ends the two-year dispute between the two companies.
The import ban threatened to complicate the rollout of Ford Motor Co’s new F-150 electric pickup truck and the Volkswagen AG’s ID.4 SUV, both due to begin production next year with EV batteries assembled at an SK Innovation plant in politically important Georgia.
The dispute became a political conundrum for Biden because it was said to jeopardise as many as 6,000 battery manufacturing jobs in Georgia, prompting the state’s two Democratic senators and Republican governor to urge an intervention by the president.
One of those senators faces re-election next year.
“This settlement agreement is a win for American workers and the American auto industry,” Biden said in a statement on Sunday.
US Trade Representative Katherine Tai said the deal followed “significant engagement” by the administration.
SK and LG also agreed to withdraw all lawsuits lodged in South Korea and overseas, according to the statement. They also agreed not to undertake any legal action against each other for the next 10 years.