US EV Battery Battle Settlement: White House, SK Innovation & LG Chem Statements in Full

South Korea’s two leading lithium ion battery cell producers have agreed to end their legal battle on US soil with a $1.8bn settlement plus an undisclosed “running royalty” agreement for the domestic production of batteries for electric vehicles (EVs).

Both battery majors have also agreed “to withdraw all pending disputes in the United States and Korea, and not assert new claims for the next ten years.”

It is a move that sees emerging US-based EV producers breathe a sigh of relief after LG Chem claimed SK Innovation misappropriated trade secrets from the company, a claim which the International Trade Commission (ITC) sided with LG Chem on.

The ITC, a US-trade body which monitors import and exports of goods in order to protect domestic American industry, had issued a 10-year ban on SK Innovation for the import of equipment and raw materials, and processed battery grade chemicals.

However, due to the non-existent domestic lithium ion battery supply chain within the USA, the ban would have seen SK Innovation have to import all of its battery grade critical raw materials, cathode and anode inputs in order to make their cells – something the ITC would have forbidden.

As a result, SK Innovation would have been forced to shutter the country’s newest battery megafactory (gigafactory) in Commerce, Georgia, which is set to begin production in Q4 at an annual capacity of 10GWh and halt construction of a second 10GWh cell facility next door – a total investment of $2.6bn.

Benchmark data shows this would have left the USA bereft of 47% of its free market lithium ion battery cells going into 2022 for emerging EV producers that do not have joint-venture plants, such as the Tesla-Panasonic Gigafactory and the LG Chem – General Motors Ohio plant, at a time when President Biden is seeking to ramp up EV production.

It would have also resulted in the US losing one of the world’s only six tier one lithium ion battery cell manufacturers according to Benchmark‘s ranking of cell producers for the automotive market.

This comes as new plants in China are surging, taking Benchmark’s global total to 200 battery megafactories of which 144 are within China but only 10 in the US by 2030, Benchmark forecasts as we stand today.

The decision would have also set the US on course to losing 35% of its free market cell capacity by end-2030 considering the lead times it takes to build and ramp these super sized EV battery plants.

Benchmark’s Ranking the world’s leading producers of battery cells for electric vehicles

Here, Benchmark publishes the statements of each party in full.

President of the United States of America, Joe Biden said:

“This settlement agreement is a win for American workers and the American auto industry.

“A key part of my plan to Build Back Better is to have the electric vehicles and batteries of the future built here in America, all across America, by American workers.

“We need a strong, diversified and resilient U.S.-based electric vehicle battery supply chain, so we can supply the growing global demand for these vehicles and components – creating good-paying jobs here at home, and laying the groundwork for the jobs of tomorrow.

“Today’s settlement is a positive step in that direction, which will bring some welcome relief to workers in Georgia and new opportunity for workers across the country.

“I want to thank Ambassador Katherine Tai for her tireless work to resolve this dispute and facilitate a settlement that is good for America’s future in the electric vehicle industry, and good for job creation.

“My American Jobs Plan will help build on this momentum, creating millions of new jobs, supporting a stronger American auto industry and making sure that we win the electric vehicle markets of the future.”

Joint Statement: SK Innovation’s CEO and President, Jun Kim, and Jong Hyun Kim, CEO and President of LG Energy Solution (LG Chem subsidiary) said:

“We have decided to settle and to compete in an amicable way, all for the future of the U.S. and South Korean electric vehicle battery industries.

“In particular, we will work together to strengthen an EV battery domestic supply chain and support the U.S. Biden Administration’s effort to advance green energy policies and environmental responsibility.

“Lastly, we sincerely appreciate the Korean and U.S. government officials for their great efforts to reach an agreement.”

SK Innovation said:

“SK Innovation is grateful to the Korean and U.S. administrations and stakeholders for their efforts to resolve the battery dispute.

“We would like to express our deepest gratitude to Georgia residents, Governor Brian Kemp, Senators Warnock and Ossoff, the Georgia congressional leadership including Georgia’s state Senate and House of Representatives, as well as Jackson County and the city of Commerce for their steadfast support.

“SK Innovation has made an important decision to move forward to lead the market based on our unique technological competitiveness in the fast-growing electric vehicle and electric vehicle battery industries.

“We are committed to the green policies and environmental responsibility pursued by the Biden Administration, as well as to the growth of the Georgia economy and job creation.

 “First and foremost, we are pleased to continue and further strengthen an on-going partnership with our customers including Ford and Volkswagen. We look forward to working with our customers, and once again thank them for their unwavering support. 

 “As the agreement eliminates uncertainty about the operation and expansion of the U.S. battery business, SK Innovation plans to accelerate the stable operation of Plant 1 and construction of Plant 2 in Georgia. Also, in addition to our U.S. investments, SK Innovation plans to invest worldwide to reinforce the global electric vehicle industry.

 “SK Innovation will continue emphasizing ESG principles, and we look forward making a positive contribution to the local community.”

More Reading from Benchmark:  

Videos to Watch

“We are in the midst of a global battery arms race” Benchmark’s Moores tells Senate (February 2019) 

CNBC Mini Documentary: The US is facing a lithium-ion battery shortage as electric vehicle production ramps up (April 2021) 

CNBC Mini Documentary: Battery Recycling – How Tesla’s Battery Mastermind Is Tackling EVs Biggest Problem (April 2021) 

“Lithium ion batteries – a core platform technology” Benchmark tells US Senate (June 2020)