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SK Innovation is in a serious bind. After getting trounced by LG Chem in legal proceedings at the US International Trade Commission (ITC), SK may be forced to pay billions of dollars in damages.

While the ITC’s ruling could still be overturned by US President Joe Biden, the industry doesn’t think that’s very likely to happen. Observers are focusing on how this lawsuit will impact SK’s battery industry in the future.

Industry sources told the Hankyoreh on Feb. 14 that SK Innovation is leaning toward wrapping up its negotiations during the presidential review period. Biden has 60 days to review the ITC’s decision, which he’s authorized to veto for reasons of policy.

If the review period expires without such a veto, the ITC’s 10-year import ban will immediately go into effect. That could also impact sales of the Niro, an electric vehicle (EV) manufactured by Kia.

“The next two months are SK’s last chance to make a difference at the bargaining table,” said an industry insider.

SK doesn’t expect much from Biden, however. Unlike the last time a president vetoed an ITC decision — during the dispute between Samsung and Apple in 2013 — the ITC granted SK some concessions that take into account the public interest.

The ITC has given SK a grace period during which it can continue supplying two of its major customers: two years for German company Volkswagen and four years for US company Ford. The idea is to give those companies some time to find alternative suppliers.

The US business community isn’t counting on relief from Biden, either. Immediately after the ITC’s decision, both Ford and Volkswagen urged SK to reach a quick settlement.

“A voluntary settlement between these two suppliers is ultimately in the best interest of US manufacturers and workers,” wrote Ford CEO Jim Farley in a tweet on Feb. 12.

Volkswagen said in a statement that it ultimately hopes the two suppliers will reach a settlement outside of the courtroom.

The only person who has brought up the possibility of Biden vetoing the ITC’s decision is Brian Kemp, governor of Georgia, where SK Innovation is building a massive EV battery plant.

Financial analysts believe that ITC’s final decision will ultimately force SK to agree to a bigger settlement with LG Chem, which sued it for stealing trade secrets.

In a recent report, analysts with global investment banking company Credit Suisse noted that while LG Chem was asking for 2-3 trillion won (US$1.8-2.7 billion) before the ITC’s decision, the final amount might be upwards of 5 trillion won (US$4.5 billion).

LG Energy Solution is also cranking up pressure on SK.

Han Woong-jae, the company’s head of legal affairs, said on Feb. 11 that LG Energy Solution believes the damage caused by SK’s theft of technology also occurred in Europe, Korea and other countries. Han added that SK’s attitude will determine whether or not LG will sue SK in those countries as well.

In effect, SK Innovation has been backed into a corner. If the company is forced to pay a settlement amounting to trillions of won, its battery business is in danger of stalling before it turns a profit. Last year, the company’s battery division posted sales of about 1.6 trillion won (US$1.45 billion), amounting to an operating loss of around 400 billion won (US$362 million).

But the short-term financial hit is hardly the only danger. SK’s relationships with automakers could also be frayed by lingering uncertainty.

“If we’re forced to pay the amount that’s being mentioned recently, the very viability of our business becomes uncertain. We’re currently waiting for a response to an offer we made that would compensate LG while also enabling cooperation between our two companies,” said a source at SK.

By Lee Jae-yeon, staff reporter

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