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(LEAD) LG, SK reach last-minute settlement in ITC battery dispute

Industry 09:56 April 11, 2021

(ATTN: UPDATES with more details in paras 7-11; MAKES minor edits; ADDS photo)
By Kim Eun-jung

SEOUL, April 11 (Yonhap) -- Two Korean battery makers -- LG Energy Solution Ltd. and SK Innovation Co. -- have reached a settlement in a trade secrets dispute in the United States, company officials said Sunday, hours before a deadline for an import ban on SK.

The U.S. International Trade Commission (ITC) in February sided with LG in a trade secret case and issued a 10-year import ban on SK, while temporarily allowing shipments of battery components for Ford and Volkswagen to give them time to find new suppliers.

Their settlement averts the import ban, which was set to take effect unless President Joe Biden vetoes the ITC decision before the Sunday night deadline.

The two companies will jointly announce the results of the settlement later in the day, officials of the companies said.

An image depicting the EV battery trade dispute between LG Energy Solution Ltd. and SK Innovation Co. (Yonhap)

Their compromise will allow SK to complete the construction of the $2.6 billion electric vehicle battery plant in Georgia, which will supply electric vehicle batteries for Ford and Volkswagen.

SK earlier said it could shut down the Georgia plant if the import ban is not overturned, which could hamper the Biden administration's EV push and pledge for American jobs.

SK has claimed that it does not need LG's trade secrets as its development and manufacturing method for EV batteries is different from its rival and that it received an unfavorable ITC ruling due to destruction of evidence.

In the runup to the settlement, the Korean rivals made intensive lobbying efforts in the U.S. to grab a greater share of the rising battery market as the Biden administration pushes to accelerate the adoption of EVs.

SK Innovation Co.'s electric vehicle battery factory under construction in the U.S. state of Georgia is seen in this photo provided by the Korean battery maker on Feb. 16, 2021. (PHOTO NOT FOR SALE) (Yonhap)

LG Energy Solution, wholly owned by LG Chem Ltd., operates a lithium-ion battery factory in Michigan and is building a new factory in Ohio through its joint venture with U.S. automaker General Motors, which will be completed in 2022.

Last month, LG Energy Solution said it will invest 5 trillion won (US$4.5 billion) by 2025 to expand its battery production capacity in the U.S.

LG, which supplies Tesla and a number of automakers, is the world's No. 2 EV battery supplier with a share of 23.5 percent, and SK Innovation was in sixth place with a 6 percent share in the global EV market last year, according to SNE Research.

ejkim@yna.co.kr
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