Ahead of ITC Final Verdict on Battery Suit
SK Innovation has announced a plan to invest one trillion won in the United States ahead of a U.S. court ruling on an electric vehicle battery lawsuit filed by LG Energy Solutions.
SK Innovation said on Jan. 6 that its investment decision was prompted by growing demand for batteries in the United States. But some industry insiders see the announcement as a move to obtain a favorable ruling from the U.S. International Trade Commission (ITC), which is to hand down the final verdict in February.
SK Innovation has recently decided to issue green bonds worth US$1 billion to build its second battery plant in Georgia. SK Battery America (SKBA), SK Innovation’s subsidiary in the U.S., will issue the bonds by Jan. 25, and SK Innovation will guarantee them.
SK Innovation plans to expand its plant in Georgia with the proceeds from the bond sales. It plans to start operations of its first plant in Georgia within the first half of 2021. According to the company, it needs to expand the Georgia plant as demand for batteries, including those for Ford electric trucks, is growing.
SK Innovation’s investment decision is drawing keen attention from the battery industry as it came out at a time when its sales channels to the U.S. market could be blocked depending on the outcome of the ITC judgment. In an initial determination in February 2020, the ITC ruled in favor of LG Energy Solutions.
SK Innovation can conduct business activities normally in the United States only when it overturns the ITC’s initial determination or LG Energy Solutions withdraws the lawsuit after the two sides reach an agreement.
There are growing calls from U.S. political circles for SK Innovation and LG Energy Solutions to hammer out an agreement ahead of the ITC verdict. Some lawmakers in Georgia and Tennessee sent letters to the two companies in December 2020 to urge them to reach an agreement. Georgia is home to SK Innovation battery plant and Tennessee has a Volkswagen electric vehicle plant that will use SK batteries. Lawmakers in both regions are concerned that their local economies may suffer if SK Innovation loses the case.
The ITC was originally scheduled to announce the verdict on the case in October 2020 but has delayed it three times. LG Energy Solutions, which filed the lawsuit, is reportedly not opposed to reaching an agreement with SK Innovation.