Business secrecy suit between LG Chem and SK Innovation escalates into confrontation between global automakers

Posted on : 2020-07-23 18:33 KST Modified on : 2020-07-23 18:33 KST
Volkswagen, Ford request measures to ensure battery supplies from SK Innovation in US

The legal battle between LG Chem and SK Innovation over alleged violations of business secrecy is escalating into a confrontation between global finished automobile makers.

According to the website of the US International Trade Commission (ITC) on July 22, Volkswagen and Ford both submitted public interest comments to the ITC on May 15 asking for measures to ensure there are no disruptions to SK Innovation’s battery production. The two automakers have both signed contracts to receive batteries produced at SK Innovation’s factory in the US state of Georgia -- Volkswagen from 2022, and Ford from 2023.

In its comment, Volkswagen warned that US workers would suffer if its contract with SK was cancelled. Ford provided evidence along with comments in a document spanning 72 pages, explaining that the batteries could not be immediately substituted with others -- namely LG Chem’s -- because they had been designed to suit individual vehicle models.

As stable battery supplies have emerged as a key element in the battle to gain an advantage in the electric vehicle market, finished automobile makers have been venturing into the battery fray. The comments from Volkswagen and Ford were also in some sense a response to the offensive from LG Chem allies such as General Motors (GM). In a comment sent on Apr. 30, GM noted that it had recently established a joint venture with LG Chem and stressed that it regarded the protection of intellectual property rights as an important issue.

With the issue of jobs coming into play, politicians have also chimed in. Ohio Gov. Mike DeWine sent a letter to the ITC on May 1 in which he expressed confidence that the finalization of the commission’s initial determination would promote the public interest, the competitiveness of the US economy, and the domestic production of electric vehicle batteries. He also requested that the ITC protect investments that directly benefited the state of Ohio and the US economy. Ohio is the location where a joint GM and LG Chem factory is being established.

LG Chem filed a complaint with the ITC last year accusing SK Innovation of infringement of business secrecy concerning rechargeable batteries. Early this year, an ITC administrative law judge issued an initial determination siding with LG Chem. If the initial determination is upheld in a final determination scheduled for Oct. 5, the importation, sale, and circulation of all SK Innovation battery cells, modules, and bocks will be prohibited in the US.

By Lee Jae-yeon, staff reporter

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