American electric car makers breathed a sigh of relief after LG Energy and SK Innovation reached out Settlement At the last minute in a battle for intellectual property that could have caused havoc with Ford and Volkswagen’s plans to produce electric cars in the United States.
The US International Trade Commission imposed in February a ban A 10-year import on SK Innovation, which is set to go into effect on Sunday, after allegations that it illegally acquired the technology from rival LG Energy.
The ban could have cut off the automakers ‘supply of batteries from the SK Innovation plant in Georgia, but the agreement has kept the carmakers’ plans on track.
Under the terms of the agreement, SK Innovation will pay $ 1.8 billion (2 trillion won) in cash and proceeds to LG Energy.
“We are working together to strengthen the battery network and the environmentally friendly policy of the Biden administration,” said South Korean EV battery manufacturers in a joint statement.
“We are working to help develop the electric car battery industry in South Korea and the United States through healthy competition and friendly cooperation,” she added.
The settlement prevents a ban on importing SK Innovation batteries into the United States, which was a problem for the Biden administration, as President Biden should have considered overtaking the ITC decision if he wanted to protect battery supplies without a settlement.
The dispute threatened a $ 2.6 billion plant in Georgia that SK Innovation is building to supply Ford and Volkswagen and is seen as the key to a growing industry and the largest single investment in Georgia’s history.
SK Innovation last month pledged to pull out of the Georgia plant if the US ITC decision in favor of LG Chem is not overturned.
Ford and Volkswagen had time to change suppliers if LG Energy and SK Innovation did not negotiate an armistice, however, Ford and Volkswagen had no desire to take on the problem.
Ford and Volkswagen are ramping up their electric vehicle plans, including expanding production to early models like the Mustang Mach-E and ID.4, as well as electrifying more models.
The search for a new battery supplier could literally put those plans on hold for months, not to mention give Tesla another chance going forward.
President Biden said in statement: This settlement agreement is a win-win for American workers and the American auto industry, and a key part of my plan to rebuild better is building future electric vehicles and batteries here in America, across America, by American workers.
He added: We need a strong, diversified and flexible supply chain of electric vehicle batteries in the United States, to be able to supply the growing global demand for these vehicles and components.