Both South Korean EV battery makers, SK Innovation and LG Chem, have reached a $1.8 billion agreement after LG filed a complaint against SK for stealing trade secrets with the U.S International Trade Commission in 2019.
The U.S President Biden called this a major victory for the American workers and the American auto industry after both of the world’s largest electric vehicle battery manufacturers came to a settlement.
According to the settlement, SK Innovation will pay $1.8 billion in cash and royalties to LG Chem. Furthermore, both South Korea based companies agreed not to sue each other for the next 10 years.
This settlement means SK Innovation can shift its focus on finishing off the construction of an EV lithium-ion battery factory in Georgia. The EV plant will provide batteries to Ford and Volkswagen, both contracts that the company won before the ITC ruling.
The agreement came hours before a deadline that Biden would have to decide whether to overrule the ITC or leave the ruling as it is and risk losing jobs and resources that would have help him accomplish electrifying the U.S infrastructure.
Biden’s $2 trillion infrastructure plan involves a major portion of the bill set aside to increase electric vehicle sales and production. Several automakers will become eligible to receive federal EV tax credit for the consumers to spend on.
The need for electric vehicle battery production is imperative to a strong, diversified and resilient growth to creating good paying jobs for the U.S based EV companies.
Both Georgia democratic senators, Raphael Warnock and Jon Ossoff, as well as Republican Governor Brian Kemp urged Biden to take action to save the factories.
The settlement will bring relief to the workers in Georgia and create 2,600 new jobs opportunities for the workers across the country.
The CEOs of both South Korea-based company released a joint statement that they plan to help develop the EV battery industry in South Korea and the U.S through a healthy competition and friendly cooperation.
Currently, the electric vehicles are expensive and Tesla recently price hiked Model 3 and Model Y without an explanation.
However, once the construction electric vehicle battery is completed, critics hope it will help drive down the overall cost of electric vehicle while innovating new, better and powerful batteries that deliver longer range.