SK Innovation says LG offer to resolve dispute needs to protect U.S. business

South Korean battery maker SK Innovation Co Ltd said on Thursday it will not accept any proposal by rival LG Energy Solution to resolve a U.S. legal feud that would cripple SK’s business in that country.

SK Innovation and LG Chem’s wholly-owned battery division LG Energy Solution have been locked in a dispute over claims SK misappropriated trade secrets related to electric vehicle battery technology.

The U.S. International Trade Commission (ITC) last month sided with LG, issuing a limited 10-year exclusion order prohibiting imports into the United States of SK’s lithium-ion batteries. That ruling would become invalid if the two companies agree a settlement.

SK has received proposed terms, including financial reparations, from LG for a settlement, a person familiar with the situation said.

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.”

The ITC ruling against SK, which supplies electric car batteries to Volkswagen, Ford Motor Co and Hyundai Motor Co among others, can also be overturned by U.S. President Joe Biden.

The U.S. Transportation Department said earlier this month it would analyse the impact of the ruling on Biden’s green transportation goals. SK has warned it would be forced to halt construction of a $2.6 billion battery plant in Georgia if Biden does not use a 60-day presidential review period to overturn the decision.

The ITC ruling allowed some exemptions, permitting SK to import components for domestic production of batteries for Ford’s EV F-150 program for four years, and for Volkswagen America’s MEB electric vehicle line for two years.

SK currently has an annual capacity of about 40 gigawatt-hours of batteries with plans to ramp that up to about 125 gigawatt-hours of batteries in 2025.