By on November 27, 2019

While the automotive industry continues cleaning itself up via electrification and moral corporate messaging, most aspects of doing business have remained decently dirty. For all this striving for a utopian society, businesses still don’t like losing money and will go to great lengths to screw over the competition.

South Korean battery suppliers SK Innovation and LG Chem are currently clawing at each other like a couple of mad tigers. SK managed to secure a contract to supply Volkswagen Group with EV batteries, leading to the construction of a $1.7 billion factory in Georgia. LG did not, leading to a lawsuit. Both automakers and analysts are worried the litigation is spinning out of control, and could effectively obliterate their ability to do business in the United States.

Considering there have already been battery supply issues for low-volume EVs, conflict between suppliers has everyone worried about the future. With so many electric models on the horizon, nobody expects demand to go anywhere but up.

LG Chem took SK to court last April, claiming it had been misappropriating trade secrets and may have poached some important staffers to get the deal with VW. Now they’re basically flinging every patent infringement claim they can at each other and actively trying to ban the importation and sale of EV batteries in the United States. According to Reuters, the list of potentially impacted vehicles includes the Audi E-Tron, Kia Niro, Chevy Bolt, Ford’s upcoming electric pickup, Jaguar’s I-Pace, and every EV manufactured by Volkswagen Group in Tennessee.

From Reuters:

“Whoever loses the fight would suffer a fatal blow, unless the two reach a settlement. This will also be a setback for automakers,” said Cho Jae-phil, a professor at Ulsan National Institute of Science and Technology who worked previously at another Korean rival, Samsung SDI.

Ford spokeswoman Jennifer Flake said it was encouraging LGC and SKI to resolve their conflict without litigation and that it believed there was sufficient demand for multiple suppliers.

“We are aware of the issue. As a normal course of action, we have business continuity plans in place to protect our interests,” Flake said in an emailed statement to Reuters.

GM spokesman Patrick Morrissey said the company was aware of the dispute and at this point it did not expect any impact on the production of its Chevy Bolt electric vehicle.

Korea’s SNE Research believes the battery market will grow by 23 percent each year, reaching a value of $167 billion by 2025. That’s more than enough meat for companies to share. Unfortunately, that won’t be an option if one or both of the nation’s largest suppliers lose their cases.

If the U.S. International Trade Commission (ITC) rules in favor of LG Chem on June 5th, then SK International won’t be able to legally supply VW with product in 2022. It may not even bother to finish the factory in Georgia. According to documents obtained by Reuters on Wednesday, the ITC’s investigative staff currently recommends a motion favoring LGC as it is “the most appropriate sanction for Respondents’ (SK) widespread spoliation of evidence.”  A final decision should be made in fall of next year, unless the feuding pair can reach a mutually beneficial agreement.

[Image: Sergii Chernov/Shutterstock]

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40 Comments on “Disrupting the Industry: Korean Battery Suppliers at Each Other’s Throats...”


  • avatar
    ToolGuy

    I went to school with a guy, who knew a guy, whose father painted the “Jeep” (actually a Scout) used in Deliverance. [That’s not all I know about Georgia, but it’s the first thing that sprang to mind.]

  • avatar
    ToddAtlasF1

    We have ever so much oil and debt in the US. EVs are country-killing treason.

    • 0 avatar
      mcs

      Maybe we’d have less debt if we weren’t fighting and dying for middle eastern oil.

      • 0 avatar
        ToddAtlasF1

        Absolutely right! The only people who need to die are the traitors who’ve been preventing us from extracting our own oil. It will be far more valuable when the rest of the world has to deal with the expense of stabilizing the middle east too!

        • 0 avatar
          dal20402

          Love it when Serious Rational Conservatives suggest killing fellow citizens over a difference of opinion about energy policy.

          • 0 avatar
            ToddAtlasF1

            Did I say anything about killing them? Their treachery has one hell of a body count though. Can you afford to be honest about that?

          • 0 avatar
            dal20402

            Amazing that you can look past the first line of a three-line comment. “The only people who need to die…”

          • 0 avatar
            ToddAtlasF1

            So you know you can’t afford to be honest about the body count associated with eco-misanthropy?

          • 0 avatar
            dal20402

            Right, now I remember that in your world exhaust smoke is a vital nutrient right up there with proteins and lipids.

          • 0 avatar
            ToddAtlasF1

            1994 was when Mercedes-Benz and Volvo both advertised that their gasoline engines were leaving the air cleaner than they found it. Cue the sudden concerns about CO2, also known as the building block of life on this planet. Now, in the name of globalists like Obama’s efforts to reduce life on this planet, gas engines are polluting again with the particulates associated with direct injection. The more you know…

          • 0 avatar
            mcs

            US oil production is beginning to fall already…

            https://www.forbes.com/sites/rrapier/2019/07/21/permian-basin-oil-production-growth-is-falling-fast/#c8d8b805f480

          • 0 avatar
            Roader

            “The Green River Formation is an Eocene geologic formation that records the sedimentation in a group of intermountain lakes in three basins along the present-day Green River in Colorado, Wyoming, and Utah… The Green River Formation contains the largest oil shale deposit in the world. It has been estimated that the oil shale reserves could equal up to 3 trillion barrels (480 billion cubic metres) of shale oil, up to half of which may be recoverable by shale oil extraction technologies (pyrolysis, hydrogenation, or thermal dissolution of kerogen in oil shale).”

            https://en.wikipedia.org/wiki/Green_River_Formation#Oil_shale

          • 0 avatar
            JimZ

            well, we have a former Major League Baseball player who proudly states he’s teaching his kids it’s ok to murder anyone who doesn’t vote for Donald Trump next year, so…

          • 0 avatar
            28-Cars-Later

            https://en.wikipedia.org/wiki/The_Hunt_(unreleased_film)

        • 0 avatar
          Snooder

          Oil costing more hurts us more than it helps us.

          “More valuable” might mean that some rigger gets to buy a nice loaded up bro-dozer, but it also means everyone else pays way more for everything.

          And second, we can’t just drill forever. The stuff will eventually run out. It’s not like they’re making any more of it.

          And third, getting oil from fracking tends to pollute. I don’t know about you, but i really don’t want to live in a country where the water coming out of the tap can catch on fire.

          • 0 avatar
            Roader

            ”By the year 2000, if present trends continue, we will be using up crude oil at such a rate… that there won’t be any more crude oil. You’ll drive up to the pump and say, ‘Fill ‘er up, buddy,’ and he’ll say, ‘I am very sorry, there isn’t any.’”
            — Ecologist Kenneth Watt, 1970

          • 0 avatar
            JimZ

            Oh, I see. some guy was wrong 40 years ago so everything is wrong.

            What lazy, stupid, “thinking.”

          • 0 avatar
            28-Cars-Later

            “Oil costing more hurts us more than it helps us.”

            Petrodollar.

            “And third, getting oil from fracking tends to pollute.”

            Fracking will dissipate its just a question of when, it will not be allowed to stop because the Petrodollar (there was an argument a few years ago about ultra cheap debt helping back fracking companies in bad financial positions or something to that effect). The world of oil is changing, OPEC has less influence and Moscow has assumed an important role in world oil production. When/If Moscow becomes dominant, the Petrodollar’s days will be numbered.

            Oh and here’s a real kicker, all that cheap natural gas is produced by fracking. It is so cheap in fact, it is putting nuclear out of business. Reactors are starting to come offline and I’m not sure if Fedgov has put two and two together that a whole lot of capacity is about to disappear and what’s gonna replace it? My guess is nat gas plants because if they try to build coal certain deranged Americans will flip sh!t. So… then what happens when nat gas gets expensive again in X years and TBTB want to shift to electric cars?

            Anyone? Anyone?

            I crunched some numbers last night in an debate with my girl. Given 3MW production from a windmill and assuming a reactor only produced 583MW per day (which is the max capacity of the smallest commercial reactor, every other one produces more) @ 98 reactors x 583mw it would take something like ***19020 windmills*** to simply ***replace*** the nuclear capacity. I think the cost @ 6 like million apiece was like $800 billion, and we all know 19,xxx windmills will never be built. Ever.

            Only one reactor has come online in the 21st Century, Watts Bar 2, and only two more at Vogtle are under construction in the US.

            Tick tock.

          • 0 avatar
            Roader

            ‘What lazy, stupid, “thinking.”’

            Sorry, Mom.

            http://www.littledemocrats.net/

          • 0 avatar
            ToddAtlasF1

            The socialists behind the ecopocolypse were still being provably wrong in 2014.

            https://www.aei.org/carpe-diem/50-years-of-failed-doomsday-eco-pocalyptic-predictions-the-so-called-experts-are-0-50/

            The inevitable failures of today’s predictions will be dismissed by brainwashed sheep as easily as yesterday’s were. At some point you’ve really got to put down the climate-hoax-believer shovel. What did your teachers do to you? I’m guessing ‘Chicken Little’ isn’t considered to be a parable these days. ‘Robin Hood’ went from taking money back from evil tax collectors to being a redistributionist while decent people raised their families. Cretins have set up a new dark age by recasting freedom of speech and government accountability as universal threats, not just threats to tyrants. Stupid is as JimZ does.

  • avatar
    SCE to AUX

    Cue Jabba the Hut laughter…

    This is why Musk built his own battery factories. What a moron!

  • avatar
    SCE to AUX

    “the list of potentially impacted vehicles includes the Audi E-Tron, Kia Niro, Chevy Bolt, Ford’s upcoming electric pickup, Jaguar’s I-Pace, and every EV manufactured by Volkswagen Group in Tennessee”

    All low volume products, except the VW stuff (potentially). I thought VW had battery contracts with several mfrs beyond these?

  • avatar
    aja8888

    No worries, lots of battery suppliers will come out of the woodwork when needed. Probably from China, and we know how good their quality is: “Quality is head fake One” (LOL)

  • avatar
    Roader

    While the automotive industry continues cleaning up via crony capitalism and corporate virtue signalling…

  • avatar
    Snooder

    Ah, SK.

    First time i heard of them was from this video. https://youtu.be/L8Hg8SXNYXE watch it all the way through, it’s a doozy.

  • avatar
    65corvair

    Most of the comments have nothing to do with the article. The article had nothing to do with Donald or even oil .

    What impresses me is a Korean battery company and a German car company are putting a major amount of manufacturing in the U.S.

    Perhaps the editors could delete posts that have nothing to do with the article.

    • 0 avatar
      Roader

      In the first sentence, the implication is that gasoline cars are immoral:

      “While the automotive industry continues cleaning itself up via electrification and moral corporate messaging…”

  • avatar
    How_Embarrassing_4You

    @ jimz “well, we have a former Major League Baseball player who proudly states he’s teaching his kids it’s ok to murder anyone who doesn’t vote for Donald Trump next year, so…” Yeah and we had elected Dems and voters calling for the death of anyone who supports or votes for the President. You act like this is a one sided thing, and everytime you’re wrong.

  • avatar
    Lorenzo

    Electric cars! Batteries still don’t hold enough power. I’m waiting for di-lithium crystals.

  • avatar
    Jeff S

    @65corvair–Agree. Why not be thankful for a Korean battery company and a German car company putting a major amount of manufacturing in the U.S. I am not so worried about the US running out of oil and natural gas. The biggest issue is not supply but pollution in major metropolitan areas. Nuclear power would be the solution to producing more electricity especially since the US has the largest supply of Uranium which we as a country use very little of and export most of our supply. Getting battery technology to where it is smaller, cheaper, and longer range along with more infrastructure to support EVs will take time. Instead of fighting each other we need to count our blessings and work together to utilize our resources which we have been blessed with.

  • avatar
    Brett Woods

    I feel that automakers saying, “We will deliver hundreds of thousands of EV’s five years from now!” is cart-before-the-horse talk. Where is the announcement from our domestics that factory lines currently building transmissions and ICE components are going to be transitioned to battery manufacture?

    This needs to be a parallel component of the plan. VW’s new Salzgitter battery plant prevents them from being held economically “hostage” in the future by independent battery manufacturers.

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