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Governor of Georgia sided with SK Innovation in lost dispute with competitor
Recently, the US International Trade Commission (ITC) banned SK Innovation’s lithium batteries from importing and manufacturing in the country for ten years, as it found competing LG Energy Solution’s arguments to challenge intellectual property rights compelling. The Governor of Georgia has decided to stand up for SK Innovation as it builds a state-owned enterprise.
Image source: Electrek
As Business Korea explains, Georgia Governor Brian Kemp has offered US President Joseph Biden the right to veto the ITC decision, which can be implemented within 60 days. SK Innovation is now halfway through the construction of a lithium battery plant in Georgia. The design capacity of the enterprise implies the annual production of batteries with an aggregate capacity of 21.5 GWh, which is enough to supply 430 thousand electric vehicles with traction batteries. In total, SK Innovation should invest about $ 2.6 billion in construction.
Starting next year, the company’s existing production facilities in the state of Georgia will allow it to supply Volkswagen with traction batteries for the production of 200 thousand electric vehicles. In fact, this will cover the entire need of the German automaker to localize the production of electric cars for the American market. The ITC decision calls for a two-year deferral of the Volkswagen battery ban, but the German automaker pushed for a four-year deadline, as did Ford Motor. The American competitor was given a four-year grace period, but Ford also receives batteries from the other side of the conflict – LG Energy Solution, so it should suffer to a lesser extent.
Lack of funding forces SK Innovation to rely on the administrative resolution of the dispute with LG Energy Solution, since it is simply not able to satisfy the competitor’s claims for compensation for material damage, and the counterparty does not make concessions on the amount. If the US President does not veto the ITC decision within 60 days, SK Innovation will have to negotiate with LG Energy to continue business in the US.