WASHINGTON (Reuters) – South Korean battery makers LG Chem and rival SK Innovation Co. have agreed to resolve a trade secret dispute that has threatened a key Georgia plant and electric vehicle plans by Ford Motor Co and Volkswagen AG , reported three sources on the subject. dit.
The Biden administration, through the Office of the United States Trade Representative (USTR), faced a deadline on Sunday night to take the rare step of reversing a decision by the International Trade Commission. United States, unless the companies had agreed to an agreement. An announcement about the liquidation of battery manufacturers is expected soon, sources said.
The deal is a victory for President Joe Biden, who has made the drive for electric vehicles and battery production in the United States a top priority. The global auto industry is rushing to develop electric vehicles and Biden has proposed spending $ 174 billion to increase electric vehicle sales and expand cargo infrastructure.
The ITC in February sided with LG Chem after the company accused SK of seizing trade secrets related to EV battery technology and issued a ten-year import ban, but allowed SK to import components. for batteries for Ford’s EV F-150 program for four years, and Volkswagen’s American electric vehicles for two years.
SK pledged to move away from the $ 2.6 billion Georgia battery plant under construction if the ITC decision was not overturned.
The ITC also made a mistake in what it called SK’s “misconduct” and the destruction of SK documents ordered by company executives.
Ford, VW, LG and SK declined to comment.
Volkswagen of America CEO Scott Keogh wrote in a LinkedIn post on Wednesday that leaving the ITC decision could “reduce U.S. battery capacity and delay the transition to electric vehicles.”
LG first filed a lawsuit against SK in 2019 and both parties hired numerous lawyers and consultants to present their case to the Biden administration.
The administration has been pressuring the two companies to try to reach an agreement, as have VW and Ford, sources said.
U.S. Trade Representative Katherine Tai has personally participated in discussions on the solution and has urged both companies to reach a resolution, sources said. USTR declined to comment.
SK in March received proposed terms from LG, including financial reparations to deal with claims of misappropriation of LG’s trade secrets, Reuters previously reported citing a person familiar with the situation.
Georgia is home to two newly elected Democratic senators from the United States, who are an axis of the slender majority in the Biden Congress and who have talked about the importance of securing the future of the Georgia plant.
LG’s battery, LG Energy Solution, is about to complete an Ohio cell manufacturing plant with General Motors and is about to announce plans to build a $ 2.3 billion second plant in Tennessee. according to sources in Reuters.
LG has said it can manage the battery needs of carmakers if SK leaves its Georgia plant.
SK has said that LG could not handle the VW and Ford contracts, and that Chinese manufacturers could step in to meet the demand.
Bloomberg reported on Saturday the planned deal.
Reports by David Shepardson and Hyunjoo Jin; Edited by Daniel Wallis