Earlier this week, MC&T reported on the legal battle taking place between LG Chem and SK Innovation, and the latter’s alleged theft of trade secrets. Now though, the United States International Trade Commission has made their final ruling, siding in favor with LG Chem. While this may initially seem like a massive victory for General Motors’ electric vehicle battery supplier, the ruling isn’t quite as severe as initially thought. Instead, Ford’s electric F-150 battery supplier in SK Innovation will still be allowed to work with the Dearborn automaker, via a bit of a loophole.
According to Reuters, the United States International Trade Commission verdict officially bans the import of SK innovation lithium ion batteries into the States, sort of. In actuality, the ITC’s 10-year exclusion order against SK will only relate to complete batteries, not battery components. SK Innovation has been granted a four-year time period in which they can ship battery components and other parts to the United States for domestic production, specifically for use with the upcoming electric F-150 model. Volkswagen, who also sources EV components from SK, was given a two-year grace period.
While this decision is certainly easier to cope with than an immediate ban, Ford’s top brass didn’t get the ruling they were hoping for. Ford CEO Jim Farley was candid on Twitter yesterday, noting that he believed a voluntary settlement between the two suppliers was in the best interest of manufacturers and workers in the U.S. alike. It would seem that General Motors’ partner in LG Chem doesn’t share this position. That said, the automotive executive was gracious that the electric F-150 hasn’t been left entirely high and dry.
It is worth noting that this ruling is not entirely set in stone at this point, as President Joe Biden has 60 days to veto the decision should he so choose. A president has only ruled against the ITC one time in the past three decades however, which makes such a move seem unlikely. That said, the proliferation of electric vehicles is one of President Biden’s policy plans moving forwards. This ruling has the potential to slow this process down significantly, something that Ford and the federal government are likely none too pleased about.
Part of the concern on the Blue Oval’s end might have to do with their lack of investment towards battery production. During a conference call with industry analysts last week, Farley confirmed that none of the $22 billion Ford has earmarked for EV development is slated for battery development. With their supplier now facing an outright ban in just four short years, the company is going to have to scramble to make new plans. We won’t say that this is why LG Chem refused to settle initially, but we are sure that General Motors isn’t losing any sleep over this setback for their cross-town rival.
So then this whole ordeal over alleged corporate espionage has ended with far less panache than was expected. SK Innovation is certainly being punished for their behavior, but with a significant caveat in place. That said, it will be very interesting to see what Ford and VW do moving forwards, and where the two automakers will eventually end up sourcing batteries. We already know that LG Chem would be more than happy to step up to the plate, but we’ll have to wait and see.