There is a big dustup between EV battery manufacturers. The two main battery suppliers are LG Chem and SK Innovation. LG Chem and an unnamed battery maker filed a claim back in April 2019, that SK Innovation stole trade secrets from LG Chem. LF Chem makes batteries for many automakers including General Motors and Tesla. LG Chem is supplying the batteries for the soon to be launched Ford F-150 EV.
Now the US International Trade Commission has decided to ban SK’s lithium-ion batteries used in Ford’s F-150 and the Volkswagen ID4, for 10 years. After that, the ban will be lifted. The decision will have stunning complications not only for the automakers that SK supplies batteries to but the whole push surrounding electric vehicles.
LG Chem says SK poached its own people to get LG’s battery technology
The decision will allow SK to supply batteries to Ford for four years and to VW for two years “to permit these third parties to transition to new domestic suppliers.” But under these circumstances will SK complete its Georgia battery plant? SK is building the plant specifically to produce EV batteries. It will employ over 2,500 people before the middle of the decade. It plans to start production later this year.
Both Ford and VW have big plans for their EVs and it all hinges around SK supplying the needed batteries to make their plans a reality. Ford alone is investing $11.5 billion in EV models just for this year and next. Volkswagen says it has over $800 million invested in domestic EV manufacturing. That would create over 1,000 jobs along with 15,000 training opportunities and produce over 150,000 EVs a year. It says that the losers are higher-wage manufacturing jobs as well as affordable EVs.
The filing resulted from LG Chem saying SK poached its own people to get LG’s battery technology. There are also accusations that SK destroyed all evidence related to LG’s tech. SK has admitted it destroyed some evidence but did so before the complaint. In response a trade judge earlier determined that what SK did was “done with a culpable state of mind and with the intent to hide evidence of trade secret misappropriation.”
That decision resulted in a default judgment for LG Chem a year ago. Now the commission has decided on the ban. According to Automotive News, the ITC had a number of options for moving forward. It could affirm the ruling or overturn the decision and order a trial.
There are only a few companies globally that can meet GM and Ford’s demand
But this is just the tip of the iceberg. Both companies accuse each other of “infringing patents.” Each is trying to have the other’s products banned in America. Those cases won’t be addressed until the end of 2021. Until then there is a lot to win or lose in the race to electrification.
The demand for EVs is picking up steam. President Biden’s agenda for promoting EV adoption has been spelled out. It means that Ford, GM, Volkswagen, and others will need to ramp up EV production. That means they’ll need more batteries. Not less. And there are only a few companies globally that can meet the demand of a GM or Ford. One of those is SK.
Automotive News says the only solution for SK now to ask Biden to veto the ban. Overruling an ITC decision is rare, and banning the ban would be tricky. Nonetheless, that is what SK has already argued. It says banning its batteries would be bad for jobs in America and bad for climate change. It remains to be seen what this will do for F150 EV and ID4 production, and whether SK remains committed to supplying them with batteries and its Georgia plant.