The Biden administration avoided one of the more challenging early tests of its climate agenda on Saturday when two South Korean battery giants arguing over trade secrets reached a settlement to keep a massive factory complex in Georgia open, according to sources familiar with the negotiations. .
The White House had a Sunday deadline to decide whether it would veto a February decision by the U.S. International Trade Commission banning SK Innovation from importing the materials needed to build electric vehicle batteries at $ 2 factories .6 billion in Commerce, Georgia.
The case illustrates the new government’s dueling priorities as it seeks to kickstart efforts to eliminate global warming pollution from the planet while going head-to-head with China over intellectual property protection.
As late as Friday night, the company appeared far from a deal with Seoul-based rival LG Energy Solutions, which convinced the federal commercial court that SK Innovation was destroying evidence of stolen trade secrets. In February, the ITC imposed a 10-year import ban on SK Innovation, jeopardizing the supply of batteries for Ford’s electric F-150 pickup truck and Volkswagen’s Crossover series and the 2,600 jobs the company will create in the coming years. in Georgia were endangered.
The ruling also threatened President Joe Biden’s plans to electrify the country’s 276 million cars, the largest source of climate pollution in the US.
The deal will also end other ongoing US lawsuits between the two companies, including one in federal court in Delaware that was suspended until the ITC saga reached completion.
SK Innovation’s plant will represent more than 35% of US electric vehicle battery manufacturing capacity by the end of Biden’s first term, when the country is expected to have approximately 11 major powerpack manufacturing plants online.
SK Innovation A 2020 aerial photograph of the SK Battery America site in Commerce, Georgia shows construction is already underway.
That would likely force automakers to rely more on batteries made in China, which, on the other hand, builds some 100 battery factories.
The settlement, details of which were announced on Saturday morning, will likely help reverse the ruling and allow SK Innovation to keep its factory open.
The deal is a political victory. Leaders across the partisan spectrum pushed for an outcome that would keep the plant open. Georgia Gov. Brian Kemp (R) begged Biden to veto the decision if no settlement was reached. In recent weeks, Senator Jon Ossoff (D-Ga.) Has held at least one meeting to come to a deal.
Ultimately, however, the approaching deadline and the high stakes of a decision that should determine the future of a US that will grow almost exponentially in the next decade led to an eleventh-hour deal.
The loss of the plant with no deal or veto would have caused a chill in the US battery market as it appears to attract more players, said Caspar Rawles, an analyst with Benchmark Mineral Intelligence, a London-based research firm specializing in lithium. -ion. batteries and supply chains for electric vehicles.
“The message you are sending to those companies by basically closing a factory in the US for legal reasons is not a good message,” he said before the deal was announced. “It’s not the most inviting investment environment for someone who wants to spend billions of dollars, and then there is a risk that something will happen and there will be legal intervention and they will lose everything.”
A presidential veto would have been a rare move. The last time the 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 happened to be about batteries.
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