SOUTH KOREAN battery makers LG Chem and rival SK Innovation Co. have agreed to settle a trade secrets dispute that has threatened a key U.S. plant in the state of Georgia and the electric vehicle (EV) plans of Ford Motor Co. and Volkswagen AG, Reuters quoted sources briefed on the matter as saying yesterday.

The Biden administration through the U.S. Trade Representative’s Office (USTR) faced a Sunday night deadline on whether to take the rare step of reversing a U.S. International Trade Commission (ITC) decision unless the companies had agreed a deal.

The agreement is a win for U.S. President Joe Biden who has made boosting electric vehicles and U.S. battery production a top priority. The global auto industry is racing to develop EVs, and Biden has proposed spending US$174 billion to hike EV sales and expand charging infrastructure.

The accord puts an end to a bitter two-year dispute between affiliates of two of South Korea’s biggest conglomerates. After losing out to SK in its bid to win Volkswagen orders, LG accused SK of stealing trade secrets by poaching nearly 80 of its employees.

The ITC in February sided with LG Chem after the company accused SK of misappropriating trade secrets related to EV battery technology and issued a 10-year-import ban, but it allowed SK to import components for batteries for Ford’s EV F-150 program for four years, and Volkswagen’s North American EVs for two years.

SK vowed to walk away from its US$2.6 billion Georgia battery plant under construction if the ITC decision was not overturned.

The ITC also faulted what it called SK’s “egregious misconduct” and SK’s destruction of documents ordered by company executives.

LG first filed a complaint against SK in 2019 and both sides hired numerous lawyers and consultants to make their case to the Biden administration.

The administration has been pushing the two companies to try to reach a settlement, as have VW and Ford, the sources said.

(SD-Agencies)