Biden welcomes the pact between South Korean companies for the EV battery factory in Georgia

WASHINGTON (AP) – Two major South Korean manufacturers of batteries for electric vehicles said on Sunday that they had resolved a long-running trade dispute that would allow one company to embark on plans to produce batteries in Georgia. President Joe Biden called it a “victory for American workers and the American automobile industry.”

The agreement between LG Corp.

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unit LG Energy Solution and SK Innovation

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ended the need for Biden to intervene in a case closely monitored because of its implications for Biden’s daily clean energy plan, which includes a sharp rise in the number of electric vehicles as part of its climate change plan. Biden had to make a decision by Sunday night, following a ruling by the trade commission in February.

The companies said in a joint statement that SK would provide LG Energy with a total of $ 1.8 billion and undisclosed fees. They have agreed to withdraw all pending trade disputes in the United States and South Korea and will not seek new claims for ten years.

“We decided to negotiate and compete in a friendly way, all for the future of the American and South Korean electric vehicle battery industries,” said Jun Kim, CEO and President of SK, and Jong Hyun Kim, CEO and President of LG Energy.

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Also: Northvolt, backed by Volkswagen and Goldman Sachs, jumps Cuberg from Silicon Valley as the battery race on electric vehicles heats up

The companies are committed to working together to strengthen the U.S. battery supply chain and support the Biden administration’s efforts to advance clean energy policies, including electric vehicles.

The U.S. Commission on International Trade ruled in February that SK had stolen 22 LG Energy trade secrets, and that SK should ban the import, manufacture or sale of batteries in the United States for 10 years.

The decision could have left Ford Motor Co. and Volkswagen AG to deal with batteries as they both roll out additional models of electric vehicles, which is a priority for companies and for the Biden administration. SK has contracts to manufacture batteries for the Ford F-150 electric pickup and the electric Volkswagen SUV.

The commission said SK could supply Ford with batteries

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four years and Volkswagen

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two years. The decision jeopardized the $ 2.6 billion battery factory that SK is building in Commerce, Ga.

See: LG Electronics is exiting the smartphone business

Democratic Sen. Jon Ossoff of Georgia, who began negotiations between the two companies at Biden’s request, said the settlement “saved the battery factory in Commerce, Georgia, by securing thousands of jobs, billions of future investment and Georgia to be a leader in battery production.” for electric vehicles in the years to come. “

U.S. Trade Representative Katherine Tai said the agreement “builds trust” in the reliability and accountability of the two companies as suppliers to the U.S. auto industry. The agreement puts the U.S. “in a stronger position to drive innovation and … clean energy technology, while respecting the rights of technology innovators at the heart of trade and manufacturing policy,” Tai said.

He added Senator Raphael Warnock, like Ossoff, a first-term Democrat, said: “The best way to protect trade workers – and the jobs that Georgians are promised – is to get the companies involved in the settlement negotiations in good faith.” He said that he raised the issue of the battery with Biden during the president’s visit to Atlanta on March 19.

Biden said in a statement that building the electric vehicles and batteries needed for them is an important part of his $ 2.3 trillion infrastructure plan. “We need a strong, diverse and resilient supply chain for US-based electric vehicles, so that we can supply the growing global demand for these vehicles and components – creating well-paid jobs here at home and laying the groundwork for tomorrow’s business. . Today’s settlement is a positive step in that direction, “Biden said.

Gov. Brian Kemp, a Republican, called the settlement “fantastic news for Northeast Georgia and the growing electric vehicle industry in our state.”

In a statement, Ford said the agreement “allows us to focus on delivering a range of world-class battery-powered electric vehicles to our retailers and fleet customers, while supporting American workers, the economy and our common goal of protecting the planet.” ”

MarketWatch contributed

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