Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

S.Korean battery makers agree $1.8 billion settlement, aiding Biden's EV push

Stock MarketsApr 11, 2021 09:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: The logo of LG Chem is seen at its office building in Seoul 2/2

By David Shepardson, Hyunjoo Jin and Heekyong Yang

WASHINGTON/SEOUL (Reuters) -South Korean battery makers LG Energy Solution and SK Innovation Co agreed on Sunday to settle disputes over electric-vehicle (EV) battery technology, avoiding a potential setback for U.S. EV ambitions.

The settlement after marathon talks by affiliates of two of South Korea's biggest conglomerates was announced just hours before a Sunday night deadline for President Joe Biden's administration to decide whether to take the rare step of reversing a U.S. International Trade Commission decision (ITC).

In a statement, Biden called the settlement "a win for American workers and the American auto industry.... We need a strong, diversified and resilient U.S.-based electric vehicle battery supply chain".

The core dispute had threatened the EV plans of Ford Motor (NYSE:F) Co and Volkswagen AG (OTC:VWAGY), as well as a Georgia plant that is key to the growing industry.

The resolution is also a win for Biden, who has made boosting EVs and U.S. battery production a top priority. The global auto industry is racing to develop EVs, and Biden has proposed spending $174 billion to hike their sales and expand charging infrastructure.

SK Innovation agreed to pay LG Energy Solution, a wholly owned subsidiary of LG Chem Ltd, 2 trillion won ($1.8 billion) - 500 billion won each this year and next, and royalties for at least six years.

"We expect our payment plan will not be financially burdensome," an SK Innovation official told Reuters.

The companies agreed to drop all litigation in the United States and South Korea and not to raise further lawsuits against each other for 10 years.

"The two companies now can coexist in the global market and compete in good faith," LG Energy Solution said in a statement. SK said it would invest actively both in South Korea and abroad now that uncertainties for its EV battery business in the United States have been cleared up.

The U.S. Office of U.S. Trade Representative had faced a Sunday night deadline on whether to take the rare step of reversing a U.S. International Trade Commission decision unless the companies had agreed a deal.

The Biden administration, Volkswagen (DE:VOWG_p) and Ford had been pushing the Korean companies to settle.

DEMOCRATIC, REPUBLICAN LOBBYING FROM GEORGIA

Trade Representative Katherine Tai was personally involved in the settlement discussions, urging the companies to come to a resolution, the sources said.

"I congratulate both companies for working through their significant differences to resolve this dispute, which builds confidence in their reliability and responsibility as suppliers to the U.S. auto industry," Tai said in a statement after LG and SK announced the settlement.

"We are pleased the two battery suppliers at the center of this recent trade dispute have come together and solved their differences," Volkswagen said in a statement on Sunday.

“We are pleased that SK Innovation and LG Energy Solution have settled their differences," Ford said in a statement.

BITTER DISPUTE

In the bitter two-year dispute, LG lost to SK in a bid for VW orders, then accused SK of stealing trade secrets by poaching nearly 80 of its employees. LG filed a complaint against SK in 2019, and both sides hired numerous lawyers and consultants to make their case to the Biden administration.

The ITC in February sided with LG after the company accused SK of misappropriating trade secrets related to EV battery technology. It issued a 10-year-import ban but allowed SK to import components for batteries for Ford's EV F-150 program for four years, and VW's North American EVs for two years.

In March, SK vowed to walk away from the $2.6 billion Georgia battery plant, which is under construction, if the ITC decision was not overturned. LG said in March it could handle the battery needs of automakers if SK abandoned the Georgia plant.

Volkswagen of America CEO Scott Keogh wrote in a LinkedIn (NYSE:LNKD) post on Wednesday that if the ITC decision were left in place, it could "reduce U.S. battery capacity and delay the transition to electric vehicles."

Georgia's two newly elected Democratic U.S. senators, Raphael Warnock and Jon Ossoff, have repeatedly pressed the South Korean companies to reach agreement. The state's Republican governor, Brian Kemp, had urged Biden to intervene.

SK's plant in the town of Commerce, 110 km (70 miles) northeast of Atlanta, will employ nearly 2,600, the largest foreign investment in the state's history at nearly $2.6 billion, Kemp said. "Simply put: the livelihoods of thousands of Georgians are now in your hands."

LG Energy Solution is nearing completion of an Ohio cell manufacturing plant with General Motors Co (NYSE:GM) and is close to announcing plans to build a $2.3 billion second facility in Tennessee, sources told Reuters.

In March, LG announced $4.5 billion investment plans for its U.S. battery production business over the next four years.

($1 = 1,120.9800 won)

S.Korean battery makers agree $1.8 billion settlement, aiding Biden's EV push
 

Related Articles

Is Norwegian Cruise Line Holdings a Buy Under $25?
Is Norwegian Cruise Line Holdings a Buy Under $25? By StockNews - Dec 07, 2021

The shares of Norwegian Cruise Line (NYSE:NCLH) have gained 9.5% in price to close its last trading session at $20.03. And the company expects to reverse its pandemic-related...

Square vs. PayPal: Which Stock Is a Better Buy?
Square vs. PayPal: Which Stock Is a Better Buy? By StockNews - Dec 07, 2021

Investing in high-growth fintech stocks, such as Square (SQ) and PayPal (NASDAQ:PYPL), has been a profitable endeavor for investors in recent years. The two companies continue to...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (6)
Chris Sundo
Chris Sundo Apr 12, 2021 12:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Well done Korea! Korean productivity, creativity and ingenuity is second to none. Can learn from them
Jonny Yomtoubian
Jonny Yomtoubian Apr 11, 2021 12:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
$BATT!!!!
Catholic Man
CatholicMan Apr 11, 2021 9:45AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Our governmment should not be pushing any one industry over another.
Feren Nika
Feren Nika Apr 11, 2021 1:31AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
look spaming chat , he can guaranteed profit. hahaha lol again, he look he angel from fake bubble market from biden. market not recovery. this fake recovery. new corona can hit you more dangerous covid19. 2 weeks usa colapse to fight corona again. he can frustation. not to infra plan. us you can first health plan to save your people
Dave Jones
Dave Jones Apr 10, 2021 11:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Have you got anything to go with the spam?
Michael Ajayi
Michael Ajayi Apr 10, 2021 3:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
please I don't understand and anyone explain more about this investment
John Conaghan
John Conaghan Apr 10, 2021 3:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buy LG
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email