South Korean battery makers LG Energy Solutions and SK Innovations have reconciled over a $1.8bn agreement that will retain US jobs and aid in ramping up domestic EV production. The latter has agreed to pay LG Energy (a subsidiary of LG Chem) $1.8bn for the next two years starting 2021 and royalties for at least six years.
The Biden administration welcomed this move since it would have had to intervene to reverse a previous decision by the International Trade Commission (ITC) that had ordered the closure of SK’s battery plant in Georgia. President Biden said that the move was a win for American jobs and the country’s auto industry.
LG Chem sued SK over intellectual property rights in February and won the case. The ITC had then subsequently banned the latter from trading batteries in the US for 10 years. The dispute had trickled down to domestic auto production in the US, which is already in jeopardy due to the ongoing global chip shortage.
General Motors announced further cutbacks on Friday at its truck production plants in Indiana and Michigan. The company previously reported partial suspension at its SUV production plants last week. Mitsubishi Motors will also partially halt production this month, leading to an output loss of 7,500 units across three plants in Japan and Thailand.