The two South Korean battery manufacturers, LG Energy Solution and SK Innovation announced that they had settled the two-year electric vehicle (EV) battery tech legal dispute. As a result, SK Innovation would pay 2 trillion won ($1.8 billion), 50% in cash and 50% in royalty. Aside from the compensation, the two companies would call off pending domestic and international legal proceedings. LG Energy Solution and SK Innovation also vowed not to file litigations over the next ten years.
A Win for The US EV Push
President Joe Biden also said that the agreement is beneficial to America’s auto industry, especially its EV and electrification plans. As Biden stated, the settlement alleviates the growing global EV component demand and strengthens the US EV battery supply chain. In February, the ITC issued a ten-year ban to SK Innovation, preventing it from importing EV batteries to the US. Under the order, the ITC only allowed SK Innovation to import battery components to Ford’s F-150 for four years and Volkswagen Group of America for two years.
Moreover, if the SK Innovation ban pulled through, it would have caused further setbacks to the US’ electrification goals. Additionally, the import ban could have negatively impacted SK Innovation’s EV battery and component production facility establishment in Georgia. In particular, it would have affected over 2,600 clean energy jobs and Biden’s climate change and advanced technology implementation plans.
Agreement Aftermath
“LG Energy Solution and SK Innovation have decided to settle to compete in an amicable way, all for the future of the US and South Korean electric vehicle battery industries,” said LG Energy Solution’s CEO Kim Jong-Hyun and SK Innovation’s CEO Kim Jun in a joint statement. “We are dedicated to working together to support Biden Administration’s climate agendas and to develop a robust US supply chain.” The two CEOs also stated that they are thankful to the stakeholders and government officials who helped forward the agreement.
According to LG Energy Solution, the settlement enriches its intellectual properties’ significance, strengthening its foothold within the competitive EV sector. SK Innovation also said that it would continue investing in its EV battery businesses since the dispute is over. Ambassador Katherine Tai commended the two conglomerates for working together despite their differences. Tai also added that the agreement demonstrates the companies’ reliability as US EV battery suppliers.
