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SK Innovation loses U.S. battery trade case but gets temporary OK to sell to Ford, VW


February 11, 2021

By David Shepardson and Heekyong Yang

WASHINGTON (Reuters) – The U.S. International Trade Commission (ITC) on Wednesday sided with South Korea’s chemicals and electric vehicle (EV) battery maker LG Chem Ltd, which accused its cross-town rival SK Innovation Co Ltd of misappropriating trade secrets related to EV battery technology.

The ITC said it was issuing a limited 10-year exclusion order but would permit SK to import components for domestic production of lithium ion batteries, battery cells, battery modules, and battery packs for Ford Motor Co’s EV F-150 program for four years, and for Volkswagen of America’s MEB electric vehicle line for the North America region for two years.

The ITC said the decision would allow the automakers to transition to new suppliers for these programs.

LG Chem’s wholly owned battery subsidiary LG Energy Solution praised the ruling.

“SKI’s total disregard of our warnings and intellectual property rights gave us no choice but to file this case,” said Jong Hyun Kim, CEO of LG Energy Solution. He said the company would “further strengthen the protection of intellectual property rights going forward.”

SK Innovation, in a statement, said it regretted the ITC’s decision “but it’s a relief that we will continue to supply to Ford and Volkswagen.”

SK noted there was a 60-day presidential review period in which President Joe Biden could decide to reverse the ruling. Biden has made electric vehicles and reducing vehicle emissions a top priority.

LG Chem split off its battery business renamed as LG Energy Solution, an EV battery supplier for Tesla Inc and General Motors Co. It filed its U.S. trade complaints against SK Innovation in April 2019 alleging that its rival stole trade secrets.

It sought to block SK from bringing batteries and components into the United States, as well as manufacturing systems needed for U.S. production which is scheduled to start in 2022.

SK Innovation is building two EV battery factories in Georgia to manufacture batteries for us in Volkswagen and Ford electric vehicles. LG Chem has set up an EV battery cell venture plant with GM in Ohio.

Ford said the “ITC decision supports our plans to bring the all-electric Ford F-150 to market in mid-2022.”

Volkswagen and Ford previously warned a U.S. legal row between South Korean battery makers could disrupt supplies of the key EV parts and cost U.S. jobs during the COVID-19 pandemic. VW did not immediately comment Wednesday.

(Reporting by David Shepardson in Washington and Heekyong Yang in Seoul; Editing by Chris Reese and David Gregorio)