Korean battery makers LG Energy and SK Innovation agreed to settle a trade secret dispute that threatened supplies of this key product for electric vehicles in the United States, The New York Times reported this Monday in its print edition.
The companies had been at legal odds since April 2019 and reached a $1.8 billion agreement to “compete amicably, all for the future of the electric vehicle battery sectors in the United States and South Korea,” their CEOs highlighted in a joint note, according to EFE.
According to the news agency, the United States International Trade Commission (USITC) had issued an order in the litigation in favor of LG and threatened to prohibit SK from supplying batteries to the United States, putting at risk a manufacturing plant in the state of Georgia, which promises hundreds of jobs.
Democratic and Republican state officials asked the Biden administration to address the situation. This is because he has veto power over USITC decisions. However, the companies announced their pact on Monday.
Statement from the battery makers
In a statement, the firms detailed the agreement whereby SK will pay LG $1.8 billion. According to the Times, officials from Tai’s office and other parts of the government had been meeting with LG and SK to bring the parties to an agreement.
“I congratulate both companies for working through their significant differences to resolve this dispute, which builds confidence in their reliability and responsibility as suppliers to the U.S. auto industry,” said Government Trade Representative Katherine Tai in a statement on the agreement.
SK leader Jun Kim said the common ground reached by the parties “will help provide a stable battery supply chain to important partners, including Ford and Volkswagen, while allowing SK Innovation to operate its Georgia plant without disruption. The agreement allows the two companies to coexist peacefully in the global market and compete in good faith.”