[NEWS IN FOCUS] LG Chem, SK Innovation throw final punches in battery brawl

Home > Business > Industry

print dictionary print

[NEWS IN FOCUS] LG Chem, SK Innovation throw final punches in battery brawl

Headquarters of SK Innovation and LG Chem in Seoul. [YONHAP]

Headquarters of SK Innovation and LG Chem in Seoul. [YONHAP]

The year-long battery brawl between LG Chem and SK Innovation is coming to an end in two weeks, but the two battery makers still seem to be a long way from making amends.
 
If the two fail to reach an agreement before the U.S. International Trade Commission (ITC) announces its final ruling next month, SK Innovation may end up being forced to close a massive electric vehicle (EV) battery plant in Georgia in the United States before it ever actually begins mass production.
 
After starting an investigation on LG Chem’s request in May 2019, the ITC made an initial determination in favor of LG Chem in mid-February. The two companies have been engaging in talks for a settlement since then, but local media outlets have reported little progress saying they were unable to get close to agreement on the sum of money LG wanted SK to pay to stop the ITC procedure.
 
Neither company has spoken publicly on the progress of the settlement discussion, but it’s not hard to guess their relationship hasn’t improved much.
 
After months of silence, the fighting started again in early September. LG Chem reported to the U.S. ITC in late August that SK Innovation had erased critical evidence and sued LG on infringing patents that were LG's to start with.
 
This complaint regards a separate ITC suit SK Innovation filed in September 2019, claiming LG violated its No. 994 battery patent which contains the structure of pouch-type lithium-ion battery cells.  
 
In a Sept. 4 statement, LG Chem claimed that same technology was already being used in A7 batteries first sold to carmaker Chrysler in 2013 — years before SK registered the patent in 2015.
 
“Forensics revealed that SK Innovation erased documents related to LG’s battery technology and patent No. 994, restored them, left copies and shared them with SK’s lawyer but did not submit them to the ITC,” LG said.
 
SK Innovation denied both claims and filed a complaint to the U.S. ITC on Sept. 11. According to the company’s Tuesday statement, released after the ITC complaint was made public, the documents LG claimed were erased were properly saved in its database and offered to the ITC. Patent No. 994 also contained different technology from what was used in LG’s A7 battery, it said.
 
“Thinking from common sense, it’s absurd that we would erase relevant documents for a patent infringement suit we filed,” SK said in the statement, slamming LG’s move as a strategy to impose a framework that would work against SK in ongoing suits.
 
At the moment, the future looks grim for SK Innovation, Korea’s third largest EV battery supplier. The U.S. ITC in April did announce it would “review the initial determination in its entirety.” While the decision to fully review is not common, the ITC has not reversed its initial determination in similar cases since 2010.
 
SK has already lost one civil suit against LG. On Aug. 27, the Seoul Central District Court dismissed SK’s request to halt ongoing suits regarding its larger rival and receive 1 billion won ($861,000) in damages. This was the first domestic legal ruling in the battle between the two.
 
But the worst-case scenario for SK Innovation is the loss in the main suit regarding the misappropriation of trade secrets. Halting exports of batteries, parts and production facilities could put a stop to two large-scale EV battery plants in Georgia, both under construction.
 
If completed as planned, they were to have a combined annual capacity of 20 gigawatt hours by 2023, equivalent to supplying 400,000 EVs. At the moment, LG Chem is the only company that runs an EV battery plant in the United States, located in Michigan.
 
The problem is not solely SK Innovation’s — the company already has large contracts with Ford and Volkswagen, two of the largest U.S. carmakers that pledged to expand the number of EVs in their product portfolio. 
 
SK’s struggles raise an issue for them as well because EV batteries are often developed in partnership with carmakers to optimize performance per model, not to mention that securing battery supply is already a struggle as demand climbs.
 
Both U.S. companies have offered a helping hand to SK, sending documents to the ITC this year warning of the supply crisis and the negative impact in employment the decision could incur. SK is hoping that the current administration will overrule the ITC’s determination out of concerns over employment in Georgia and neighboring regions, which are part of the industrial “Rust Belt.”
 
The U.S. ITC’s final determination is due on Oct. 5.
 
BY SONG KYOUNG-SON   [song.kyoungson@joongang.co.kr]

More in Industry

Useful pasta

Dokdo medal

Hydrogen-carrying vessel receives approval in principle

Baemin riders operator agrees to improve working conditions

CJ Logistics apologizes for the deaths of delivery workers

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now