If being forced to pay a $1.78 billion legal settlement to a competitor can be considered good news, SK Innovation responded positively to the conclusion of its trade dispute with LG Energy Solution this month by pushing ahead on its massive new electric vehicle battery plant in northern Georgia.
The resolution illustrates the high-stakes nature of EV battery plans for future vehicles.
A review of SK's $2.6 billion factory project last week found that its first 200 employees are now on-site and the company remains on schedule to have 1,000 workers there by year end, and to launch commercial production of battery cells early next year to begin supplying a new U.S.-built electric Volkswagen utility and Ford Motor Co.'s planned electric F-150 pickup.
A source familiar with SK's plans told Automotive News that despite the uncertainty hanging over the project in Commerce, Ga., the company completed construction of the first of two plants at the site this year and remains on schedule to launch the second plant in 2023.
The supplier plans to eventually expand its investment there to $5 billion and to make it a multicustomer North America production hub.
Meanwhile, LG Energy also has pressed ahead, announcing late last week that it will increase its U.S. investment with a $2.3 billion battery plant in Spring Hill, Tenn., through its Ultium Cells battery joint venture with General Motors. It will be the partnership's second U.S. plant.
The Biden administration was instrumental in bringing a settlement in the legal battle between the two South Korean electronics giants — two companies that have been engaged in patent litigation for a decade. LG's most recent complaint that SK's batteries had benefited from misappropriated trade secrets resulted in a U.S. International Trade Commission ruling in February that could have largely locked SK out of the rapidly emerging U.S. EV battery business for a decade and rendered its massive Georgia plant useless.
The settlement will require SK to pay LG Energy $1.78 billion over six years in a combination of cash and royalties. It also prevents the two companies from suing each other for 10 years.