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Technical information
SK Innovation banned the import and manufacture of lithium batteries in the United States for ten years, but there are exceptions
eleven.02.2021 [13:22],
Gennady Detinich

US International Trade Commission (ITC) ruled over two-year dispute between South Korean companies SK Innovation and LG Chem. In June 2021, LG Chem accused a competitor of stealing trade secrets by hiring fired specialists. During the investigation, the ITC admitted that LG Chem was right and banned SK Innovation from importing and manufacturing lithium battery components and batteries into the United States for ten years.

REUTERS / Kim Hong-Ji

The Commission’s decision effectively deprives SK Innovation of access to the American electric vehicle market. At the same time, the company is building two plants in the United States for the production of lithium batteries worth $ 2.7 billion and is the main supplier of batteries for Ford and Volkswagen. For the latter companies, ITC made an exception, allowing SK Innovation to import certain batteries for Ford Motor for four years and Volkswagen for two years while they look for replacements for SK Innovation batteries.

Since the decision made by the ITC leaves no choice for SK Innovation, it is clear that it will have to resolve the issue of compensation to LG Chem. Otherwise, huge investments in the production of batteries in the United States will actually be thrown into the wind.

It should be noted that LG Chem has the largest market share of lithium batteries for electric vehicles, reaching 23.5% in 2021 (according to SNE Research), while SK Innovation has only 5.4% of this market. This creates a situation in which SK Innovation may simply disappear. At least as a standalone business unit. The battery market for electric vehicles is not very profitable and any blow could be the last.

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