Two South Korean electric vehicle battery manufacturers that built plants in the United States on Sunday said they had reached a $ 1.8 billion settlement in a trade secret dispute endangering the supply of a domestic trade and, with it, the Biden administration On the green agenda.
The announcement was made on the day of a deadline by the United States Trade Representative to decide the International Trade Commission in the intellectual property case between LG Energy Solutions and SK Innovation. The Commission’s decision for LG threatened S.K. Battery supply restrictions Putting their facility under construction in the country and in Georgia at risk.
The plant, which is still under construction, will supply batteries for electric vehicles for Ford and Volkswagen, and with the settlement agreement, SK is now also free to take business from other companies.
The dispute threatened domestic supplies of batteries for electric vehicles. The agreement prevents delays in the development of American electric vehicles and supplies.
Georgia politicians, Democrats and Republicans, were both pressuring the president to act on behalf of their state. Gov. Brian Kemp wrote to the president last month asking him to veto the commission’s decision for thousands of jobs being created in Georgia’s economy and battery plants.
Trade Representative Katherine Tai said in the statement, “I congratulate the two companies for working through a significant gap to resolve this dispute, in their credibility and responsibility as suppliers to the American auto industry.” Instills confidence. “
President Biden, in a statement on Sunday, called the settlement agreement “a victory for American workers and the American auto industry.” “An important part of my plan to build back better is future electric vehicles and batteries manufactured here in the US by American employees, all over the US.”
Officials from Ms. Tai’s office and elsewhere in the Biden administration had a meeting with the companies, hoping to encourage a deal. Senator John Osoff, a Democrat from Georgia, also worked “intimately” on mediation, As DealBook reported on Friday.
“A week ago, negotiations between these companies ceased and 2,600 Georgia jobs were at risk,” Mr. Osfo said in a statement. He said, “Billions of jobs, billions in future investment and it will be the leader in electric vehicle battery production in the coming years.”
As part of their agreement, SK Innovation will provide a total lump sum and royalty payment of $ 2 trillion ($ 1.8 billion) to LG Energy Solution. They have also agreed to withdraw all pending disputes in the United States and Korea and do not claim any new claims for the next 10 years.
In 2013, the Barack Obama administration A decision by the International Trade Commission was vetoed. In a dispute between Apple and Samsung on the basis of public interest. But such rejections are rare, and the settlement spared the Biden administration from taking a position. LG is building a plant in Ohio that will supply Batteries for General Motors Electric vehicles and Gov. Mike Devine of Ohio also wrote to President Biden about the controversy last month, Urging the chairman not to veto the decision, argued that SK should not be allowed to benefit from “stolen intellectual property” against its state workers.
The decision of the Trade Commission would have excluded SK from the domestic US market, while allowing the company Ford and Volkswagen to fulfill existing contracts. But Commerce, Ga. The plant is still under construction, and SK expressed hesitancy on continuing to build it, saying it would be unable to do additional business.
LG stated that SK eliminated its importance for domestic battery supplies and suggested that another company would buy the plant if Georgia gave up SK. But any disruption to plans in Georgia could be a problem for American automakers and the administration, as International battery supply For electric vehicles is already stressful and the administration’s green energy transition plan depends on the expansion of the use and production of electric vehicles.