SK Innovation Co Ltd, an auto battery maker company based in South Korea, witnessed a robust growth in shares in the United States after it entered into a settlement with its long-term rival LG Energy Solution. Both the companies are now open to growth opportunities in the United States since there is a higher demand for electric cars ever since Joe Biden formed the government in the country. The Biden administration has prioritised administration policies to benefit the environment by helping curb further climate change by using electric vehicles and minimising the pollution level.
The two companies agreed to enter into a settlement if the following two conditions are met. The settlement was agreed upon only after SK Innovation Co Ltd agreed to pay LG Energy Solution a sum of USD 1.8 billion to drop all the all litigation related to trade secrets dispute together with a running royalty. The second condition was to drop their legal disputes related to electric vehicles batteries in the United States and Korea and agree to a ten-year non-assertion.
SK Innovation Co Ltd is one of the leading global producers of batteries. At InterBattery 2020 hosted by South Korea's Ministry of Trade, Industry and Energy, the company presented its capacity as the "best and most well-prepared partner" to create an ecosystem for battery-related industries. It also aimed to make its name a byword of battery safety with no history of battery fire incident in the 10 years of supplying batteries. SK Innovation has been leading the development of long-life batteries enabling long-range driving based on its technological capacity. It successfully test-drove an electric vehicle with their batteries, which ran for about 1,000 km.
The dispute between the two companies where LG Energy Solutions accused SK Innovation Co Ltd of misappropriating trade secrets related to EV battery technology led to risking a USD 2.6 billion plant in Georgia that the latter is building to supply batteries to Ford Motor Co and Volkswagen AG. On being accused, SK Innovation had threatened to walk away from the project if the decision by the United States International Trade Commission decision in favour of LG Chem was not overturned.
The present agreement to withdraw the legal disputes is expected help both these companies flourish in the United States. The CEO of SK Innovation Kim Jun, in his message to the employees, also said that this settlement will “enable us to accelerate the construction of the Georgia, U.S. plant and actively promote additional investment and cooperation in line with the development of the U.S. and global electric vehicle (EV) industry.”
The agreement was readily welcomed by the President of the United States, Joe Biden as well as Ford and Volkswagen as it would lead to further growth in the sector of electric vehicle batteries, as the rise of electric vehicles directly impacts and benefits the idea of sustainable growth and reduction of environmental damage. The United States has been witnessing increased demand for electric vehicles in the past few years, especially with the rising demand for Tesla models. The country has one of the highest numbers of electric vehicles on road already.