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[News Focus] No signs of settlement between Korea’s warring battery makers

ITC says fault clearly with SK Innovation, but political lobbying may prevent early resolution

(Yonhap)
(Yonhap)
Nearly a month has passed since the US trade court delivered a victory to LG Energy Solution in its trade secret dispute with crosstown rival SK Innovation, but the two sides appear no closer to ending their bitter war.

Quite the contrary. The fight between the world’s two leading battery producers for electric vehicles has now spilled over to the White House, much to the dismay of Seoul officials, who hope for an early resolution to the matter, saying this would help Korea maintain its leadership in the lucrative, yet cutthroat, battery industry.

On Thursday (US time), the United States International Trade Commission released a detailed statement explaining the reasoning behind its Feb. 10 decision to slap SK Innovation with a 10-year ban on importing its batteries into the US. In the document, it said SK Innovation’s “extraordinary” theft of trade secrets and destruction of evidence were planned and organized at a high level.

“It is clear that SKI, without the stolen LG Chem trade secrets, would not have been able to develop the information stolen in anything less than 10 years,” the US institution said. LG Energy Solution was formed late last year after a split-off from LG Chem.

The institution even criticized Ford, one of the two US automakers that source electric vehicle batteries from SK Innovation, for continuing its business partnership with the firm knowing of its illicit conduct.

The ITC’s clear-cut message that the blame lies with SK Innovation comes as the firm appeals to US President Joe Biden to overturn the ruling on public policy grounds. It says thousands of US jobs are at stake, as the punishment would derail its plans to set up a major production base in Georgia.

“The ITC’s decision threatens to undermine the US national interest in multiple dimensions,” the company said in a statement. “It would harm the US economy by destroying thousands of high-tech green energy jobs. It would frustrate US plans to protect the environment by producing batteries for electric vehicles and stationary storage.”

The import ban, which has a grace period of up to four years, will go into effect in mid-April unless President Biden exercises his veto power. No ITC decision on a case involving trade secrets has ever been overturned.

While pinning hopes on the US leader to take what would be quite an unusual step, SK Innovation does not appear fully committed to an out-of-court settlement with LG Energy Solution. In a conference call Friday, LG Energy Solution said no talks had taken place between the two companies since the ITC ruling. It said SK Innovation had not responded to its call to return to the table and that their differences over settlement money were “in the trillions of won.”

By Song Su-hyun (song@heraldcorp.com)
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