The US ITC has just banned SK Innovations from manufacturing at it's new battery plant in the US, which was slated to make the batteries for the ID.4 and Ford EV pickup. The order allows 2 years production for VW and 4 years for Ford, to allow Ford and VW to make other arrangements. But it is unclear if SK Innovations will continue construction of the two battery plants in the US, as a result. The plant making batteries for the ID.4 was scheduled for pilot production this year and full-scale production in 2022. This plant would have produced ID.4 batteries for the TN plant. If that battery plant does not start up, VW will have to get batteries from other suppliers and that may be a problem as most battery plants' production is pretty well committed for the next few years. SK Innovations has the option of selling the battery plants, but this "could" put a hitch in continuing construction and delay production of ID.4 batteries for the TN plant. Plus, the purchaser would probably need to license the technology from LG Chem. I think it's certain that the battery plants will be completed, but probably not on the current expedited schedule. The licensing issue would probably mean that the plants would sell for a discount, which is why SK Innovations may not be willing to continue construction. Either Ford or VW could buy/lease the plants but this could mean delays. The ITC order is based on a finding that SK Innovations used LG Chem technology, so it's also unclear what effect this may have on actual operation of the plants. SK Innovations may be able to license the operation of the plants from LG Chem but this could increase the price SK Innovations was going to charge for the batteries. Or, LG Chem could purchase the plants. In short, there could be delays in production of the ID.4 in the US because of lack of batteries.
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ted99
There is too much money to be made for both SK and LG. The two year period is to allow SK and LG to come to an agreeable settlement to pay LG for the infringement. As you said it gives both VW and Ford to also find another supplier as well. My guess is this may be why VW invested a billion+ dollars into another battery manufacturer as well to hedge their bets. Either way, no one wants to lose market share, so they will posture with demands and counter demands, but in the end an agreement will be made.
Interesting article as well. CNBC: VW 'unintended victim' in battery supplier dispute, seeks four-year reprieve.
www.cnbc.com
VW 'unintended victim' in battery supplier dispute, seeks four-year reprieve
The German automaker has invested $800 million to build electric vehicles in Tennessee and hiring hundreds of employees.
www.cnbc.com
SK Innovation Accelerates Hiring at its First U.S.-based Electric Vehicle Battery Site in Georgia
With this level of investment (see pictures), they will come to some agreement.
![1475]( "1475")
![1476]( "1476")
With this level of investment (see pictures), they will come to some agreement.
I can only hope this is true. I would very much prefer to have US made battery packs than something done in China. No offense to China, but quality control is very limited, if any.
Google Street View hasn't been updated since May 2019, but you can see the inital factory construction as of then: Google Maps
I am sure SK will come up with a work around. Maybe they change their design or license the technology.
The plot thickens. I don’t fully understand how both the prior decision and this one can be true at the same time, but hopefully more will emerge.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/DYL6YNK7S5ML5BTOHPF25VNXFU.jpg)
www.reuters.com
U.S. ITC says SK Innovation didn't infringe LG Energy Solution patents
The U.S. trade watchdog cleared South Korean battery company SK Innovation Co Ltd (096770.KS) of violating rival LG Energy Solution's patents in a preliminary ruling, sending SK shares surging 15% on Thursday.
www.reuters.com
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