Breathe a sigh of relief at VW and Ford: Two important suppliers of the automobile manufacturers have settled a dispute worth billions. The impending setback for the production of electric cars has thus been averted.
The two South Korean suppliers SK Innovation (SKI) and LG Energy Solution agreed to suspend all legal proceedings in the United States and South Korea and pledged not to bring legal action for the next ten years. SKI will also pay LG Energy the equivalent of $ 1,8 billion in cash and licenses. LG had sued SKI for stealing trade secrets. "The two companies can now coexist in the global market and compete in good faith," announced LG Energy Solution - a subsidiary of LG Chem.
The background to this is a legal dispute that has been raging between the two battery manufacturers since 2019. SKI had the order from the bigger rival LG Volkswagen hunted down for the delivery of e-car batteries in the USA in 2018. In early 2019, SKI began building a $ 1,7 billion factory in the US state Georgia. From there, batteries are to be delivered to the VW plant in Chattanooga, around 2022 kilometers away, from 200. SKI also wants to supply Ford from Georgia. Volkswagen and Ford had already warned of the consequences of the dispute for production and jobs in the US amid the corona crisis.
Success for US President Biden
Georgia was also worried about losing jobs. The governor of the US state, Brian Kemp, therefore had US president Joe Biden asked to overturn a ruling by the US International Trade Commission (ITC). The latter had sided with LG Chem and, among other things, only allowed SKI to import components for the production of lithium-ion batteries in the USA for Volkswagen for two years and for the US automaker Ford for four years.
Biden had set a deadline for a decision by Sunday evening. His government, Volkswagen and Ford have urged the two battery manufacturers to reach an out-of-court settlement, people familiar with the negotiations told the news agency Reuters. The agreement is also a success for Biden. He wants to promote the production of e-cars and has promised to help of 174 billion dollars.