WASHINGTON (Reuters) – South Korean battery manufacturers LG Chem and rival SK Innovation Co have agreed to settle a trade secret dispute that has threatened a major Georgia plant and the electric vehicle plans of Ford Motor Co and Volkswagen AG, three sources who have been informed about this. said.
The Biden administration faced a Sunday evening deadline through the office of the U.S. Trade Representative (USTR) to take the rare step of overturning a decision by the U.S. International Trade Commission unless the companies negotiated a deal . An announcement of the battery manufacturers’ settlement is expected shortly, the sources said.
The deal is a victory for President Joe Biden, who has made boosting electric vehicles and US battery production a top priority. The global auto industry is racing to develop EVs, and Biden has proposed spending $ 174 billion to increase electric car sales and expand charging infrastructure.
The ITC sided with LG Chem in February after the company accused SK of abusing trade secrets related to EV battery technology and issued a 10-year import ban, but it allowed SK to import battery components for Ford’s EV F -150 program for four people. years, and Volkswagen’s North American EVs for two years.
SK pledged to walk away from the $ 2.6 billion battery plant under construction in Georgia if the ITC decision were not reversed.
The ITC also criticized what it called SK’s “blatant misconduct” and SK’s destruction of 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 if the ITC decision remains in effect, it could “reduce US battery capacity and slow the transition to electric vehicles.”
LG first filed a complaint against SK in 2019 and both parties hired numerous attorneys and consultants to present their case to Biden’s administration.
The government has pushed the two companies to try to reach a settlement, as have VW and Ford, the sources said.
U.S. Trade Representative Katherine Tai has been personally involved in the settlement talks and urged both companies to find a solution, sources said. USTR declined to comment.
SK received proposed terms from LG in March, including financial reparations to address LG’s trade secret abuse claims, Reuters previously reported citing a person familiar with the situation.
Georgia is home to two newly elected Democratic US senators who are at the heart of Biden’s small congressional majority and both have spoken about the importance of ensuring the Georgian factory’s future.
LG’s battery unit LG Energy Solution is nearing completion of a cell plant in Ohio with General Motors and announces plans to build a second $ 2.3 billion plant in Tennessee, sources told Reuters.
LG has said it could meet car manufacturers’ battery needs if SK leaves its Georgia plant.
SK has said that LG could not meet the contracts from VW and Ford, and that Chinese manufacturers could intervene to meet the demand.
Bloomberg announced the expected deal earlier on Saturday.
Reporting by David Shepardson and Hyunjoo Jin; Editing by Daniel Wallis