Battery manufacturers settle dispute – relief at VW and Ford

Battery manufacturers settle dispute - relief at VW and Ford-relief

All clear at Volkswagen and Ford. The two South Korean battery manufacturers SK Innovation (SKI) and LG Energy Solutions have reached an out-of-court settlement of a multi-billion dollar legal dispute. Impending bottlenecks in the production of electric cars are thus off the table.

As the “Spiegel” reports, both companies agreed to withdraw all legal proceedings in the USA and South Korea and to refrain from lawsuits in the next ten years. Accordingly, SKI will also pay LG Energy the equivalent of 1.8 billion dollars in cash and licenses. LG had sued SKI for stealing trade secrets. “The two companies can now coexist and compete in good faith in the global market,” LG is quoted as saying.

According to “Spiegel”, the background is a legal dispute between the two battery manufacturers that has been smoldering since 2019. In 2018, SKI wrested the order from Volkswagen to supply electric car batteries in the USA from its larger rival LG. In early 2019, SKI began building a $1.7 billion factory in the US state of Georgia. From there, batteries are to be delivered to the VW plant in Chattanooga, around 200 kilometers away, from 2022. SKI also wants to supply Ford from Georgia. Volkswagen and Ford had already warned of the consequences of the ongoing dispute for production and jobs in the USA in the midst of the Corona crisis.

Georgia was also concerned about job losses. The governor of the US state, Brian Kemp, had therefore asked US President Joe Biden to overturn a ruling by the US International Trade Commission (ITC). This 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 carmaker 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 makers to settle out of court, people familiar with the negotiations said. The agreement is also a success for Biden. He wants to promote the production of electric cars and has promised aid of 174 billion dollars.

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1 thought on “Battery manufacturers settle dispute – relief at VW and Ford”

  1. The battery cake of the future should easily be enough for two or more battery manufacturers.

    It’s nice that the dispute has now been settled and the manufacturers aren’t tripping one another, as this would have hindered the rapid spread of the e-car and only made the combustion engine lobby happy.

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