SK Innovation Will Not Accept Settlement Until Its Business Is Secured

According to media reports, SK Innovation has received proposed terms of a settlement from LG Chem‘s LG Energy Solution in a dispute over claims SK Innovation misappropriated trade secrets.

The company didn’t reveal any details, but said that it will not accept any proposal if it will make no point to continue the battery business in the U.S. or reduce competitiveness.

“SK declined to comment on specific offers, but said in a statement it would “closely review the competitor’s terms of demand in the future, however, those terms will not be acceptable if they lead us to think there is no point in continuing our battery business in the United States or reduce our business competitiveness.””

It’s a difficult situation. The company’s battery business is basically banned in the U.S. for 10-years, aside from the 4-year period to continue the Ford F-150 Electric program and the 2-year period to continue the Volkswagen ID.4 (MEB) program. There is no point to build the two plants and then wait 6/8 years to restart production.

We guess that the settlement value is very high, so there might be also no sense to agree to produce batteries without any profits or at a significant loss.

It would explain why SK Innovation would like to see the ban reviewed by President Joe Biden’s administration (who has still about half of the 60-day period to reject the ban). But again, what then would hold SK accountable?

The more we hear about this case, the more it seems that the investment in two battery plants in Commerce, Georgia might be really canceled. Then, the construction site will be acquired by someone else.