"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 LG Chem 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 EV.
Kia, Jaguar Land Rover and Volkswagen, which also owns Audi, declined to comment.
VW has said it is worried there will not be enough batteries for all the EVs it plans to launch in the next five years, partly because producers such as LG Chem and China's CATL do not have enough skilled workers for new plants in Europe to ramp up output quickly.
According to Korea's battery industry tracker SNE Research, the market for EV batteries -- the most expensive and important component in the vehicles -- is set to grow 23 percent a year to reach $167 billion by 2025. That would make bigger than the global memory chip market which is expected to be worth $150 billion by then.
In one court filing, LG Chem said its rival poached employees working on its own project to supply batteries for VW's MEB electric vehicle architecture and that SKI only won the VW contract because it had misappropriated trade secrets.
SKI has denied stealing trade secrets, saying its staff signed agreements not to use information from former workplaces. "We value intellectual property," a spokesman for SKI said.
If the U.S. International Trade Commission rules in favor of LG Chem on June 5, when it is due to make a preliminary ruling, that could jeopardize SKI's plans to supply VW in the U.S. with batteries from Georgia or a new factory in Hungary, according to court filings.
In April, LG Chem asked the ITC to block SKI from bringing batteries and components into the U.S., as well as manufacturing systems needed for U.S. production, which is scheduled to start in 2022.
The SKI spokesman said there had been no change to its schedule for the factory, which will have the capacity to make batteries for more than 200,000 EVs a year. He said SKI had received inquiries about the lawsuits from customers, including if they would have an impact on supplies, without elaborating.
LG Chem said a final ruling on the case would be made on Oct. 5 next year but it asked the ITC earlier this month to make a so-called default judgment against SKI quickly.
According to a memo obtained by Reuters on Wednesday, the commission's investigative staff recommended a motion in favor of LG Chem as it is "the most appropriate sanction for Respondents' (SKI's) widespread spoliation of evidence."
Evidence spoliation is destruction or alteration of evidence that may be used in a legal proceeding.
The staff also said a two-day hearing may be held "because of the severity of the allegations of misconduct and the extraordinary nature of the relief requested by (LG Chem)."
SKI denied the allegation of evidence spoliation in a statement on Wednesday, saying it is "sincerely responding to any investigation by the ITC" and its statement of position filed with the panel will clear the "groundless" accusation.