The Biden administration on Saturday avoided one of the first difficult tests on its climate agenda, when two South Korean battery giants feuding over trade secrets reached an agreement to keep a huge Georgia factory complex open, according to sources familiar with the negotiations.
The White House faced a deadline on Sunday to decide whether to veto a U.S. International Trade Commission decision from February that banned SK Innovation from importing the materials needed to build electric vehicle batteries in a pair of 2,600 plants. million dollars in Commerce, Georgia.
The case illustrates the dueling priorities of the new administration as it seeks to initiate efforts to eliminate global warming pollution from the U.S. economy as it goes head-to-head with China. to protect intellectual property.
On Friday night, the company seemed far from a deal with rival Seoul-based rival LG Energy Solutions, which convinced the federal commercial court that SK Innovation destroyed evidence of stolen trade secrets. In February, the ITC imposed a ten-year import ban on SK Innovation, jeopardizing the supply of batteries for the Ford F-150 electric pickup and Volkswagen’s Crossover series and threatening the 2,600 jobs that the company planned to occupy Georgia for the next few years.
The ruling also runs the risk of delaying President Joe Biden’s plans to electrify the nation’s 276 million strange cars, the U.S.’s main source of climate pollution.
The agreement will also put an end to other ongoing U.S. lawsuits between the two companies, including one in a Delaware federal court that had been on hold until the ITC saga came to an end.
The SK Innovation plant will include 35% of the production capacity of electric vehicle batteries in the United States by the end of Biden’s first term, when the country is expected to have approximately eleven large online powerpack manufacturing plants.
SK Innovation An aerial dam from 2020 from the site of SK Battery America in Commerce, Georgia, shows construction already underway.
This would probably force carmakers to rely more on batteries made in China, which, by contrast, builds about 100 battery plants.
The deal, details of which were set to be released on Saturday morning, will likely help reverse the ruling and allow SK Innovation to keep its plant open.
The agreement is a political victory. Leaders from across the party spectrum pressed for a result that would allow the plant to remain open. Georgia Gov. Brian Kemp (R) asked Biden to veto the decision if no agreement was reached. In recent weeks, Sen. Jon Ossoff (D-Ga.) Has held at least one meeting to try to negotiate a deal.
But ultimately, the impending deadline and big bets on a decision that should define the future of near-exponential U.S. growth in the next decade led to an eleven-hour deal.
The loss of the factory without an agreement or a veto would have caused a chill for the U.S. battery market as it appears to be starting to attract more players, said Caspar Rawles, an analyst at Benchmark Mineral Intelligence, a research firm based in London specializing in lithium ion batteries and electric vehicle supply chains.
“The message you send to these companies, essentially, when you close a plant in the United States for legal reasons, doesn’t send a good message,” he said before the deal was announced. “It’s not the most attractive investment environment for someone who wants to spend several million dollars, and there’s a risk that something will happen, there’s legal intervention, and they’ll lose everything.”
A presidential veto would have been a rare step. The last time power was used was in 2013, when President Barack Obama blocked an ITC ruling that would have prevented Apple from importing some iPads. Ronald Reagan set the record, vetoing four ITC decisions, including one that coincidentally dealt with batteries.
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