SEOUL (Reuters) – South Korean President Moon Jae-in on Monday welcomed the decision of two South Korean electric vehicle battery makers to settle a long-standing intellectual property dispute that threatened thousands of American jobs and the environmental policies of President Joe Biden.
By agreeing to pay 2,000 billion won ($ 1.8 billion) to LG energy solution on stolen trade secrets, SK Innovation can now go ahead with manufacturing plans Battery in Georgia for electricity Ford vans and Volkswagen SUV.
In a series of tweets, Moon said the last-minute business settlement on Sunday was “happy” and “very meaningful” and would help stabilize global supply chains in a fast-paced, increasingly struggling industry.
The South Korean Ministry of Trade, Industry and Energy called in a press release for “stronger cooperation and solidarity” between South Korean battery companies which are now expected to focus on “the preparing for the future in the face of intense global competition “.
The deal between the companies avoided intervention by Biden in a closely watched case for its implications for its clean energy program, which includes the drastic increase in the use of electric vehicles to combat climate change.
Biden had until Sunday night to decide whether to step in, following a February trade commission decision. He called the deal a “victory for American workers and the American auto industry.”
In a regulatory filing with South Korean financial authorities, SK Innovation said it would provide LG Energy with a lump sum payment of 1,000 billion won ($ 888 million) and the same maximum amount of royalties. The companies also agreed to withdraw all ongoing trade disputes in the United States and South Korea and not to assert new claims for 10 years.
The US International Trade Commission ruled in February that SK had stolen 22 trade secrets from LG Energy and that SK Innovation was to be banned from importing, manufacturing or selling batteries in the United States for 10 years.
The move put at risk a $ 2.6 billion battery factory SK Innovation is building in Commerce, Georgia. The company has contracts to manufacture batteries for a Ford F-150 electric pickup truck and a Volkswagen electric SUV.
Despite the costly deal, SK Innovation’s stock price rose nearly 12% on Monday to close at 266,500 won ($ 237) per share, reflecting a return in investor confidence as the company avoided a setback potentially more important in its business.
Lee Dong-wook, analyst at Kiwoom Securities in South Korea, said the deal eases supply uncertainties for SK Innovation customers, including Ford and Volkswagen, who have fought for batteries as they were deploying other models of electric vehicles.
It also frees SK Innovation from what would have been massive spending on legal fees and lobbying activities, which could potentially help the company get a profit from its battery business sooner than expected, Lee wrote in a report.