SEOUL : The International Trade Commission has banned South Korea’s SK Innovation from exporting batteries used in electric vehicles to the United States.
The U.S. trade panel ruled in favor of LG Energy Solutions last week on its claim that SK Innovation had stolen its trade secrets to develop the batteries. Unless the Biden Administration vetoes the ITC verdict in the next two months, SK Innovation will not be able to export some of its lithium-ion battery products to the United States or manufacture them in the country for 10 years.
The company has spent billions of dollars to build two EV battery factories in Georgia, which could create some 6,000 jobs.
SK Innovation’s shares dropped almost 10 percent on Monday — the biggest intraday decline in about a year. The stock finished down 4.2 percent at the end of the day.
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Monday was the first trading day after Wednesday’s ITC ruling because the Korean stock market closed for the Lunar New Year holidays.
Meanwhile, LG Chem gained 3.1 percent Monday. LG Energy Solutions, which spun off LG Chem in December, threatened further legal action against SK Innovation.
“It depends on how SK Innovation acts whether or not we will file other suits in such regions as Europe based on the ITC decision,” LG’s legal chief Han Woong-jae said during a conference call on Thursday.
“As the Biden administration supports investment in eco-friendly businesses, some may hope that the president may veto the ITC ruling. But it is hard to predict for now,” Samsung Securities analyst Cho Hyun-ryeol told UPI News Korea. “Even if the president vetoes, lawsuits, including civil suits, will continue so that LG and SK should spend hundreds of millions of dollars a year. The two will eventually reach an agreement.”
Hwang Yoo-sik, an NH Investment & Securities analyst, agreed.
“There has been no case where the U.S. president vetoed an ITC ruling about the trade secret violation. Hence, President Biden is not likely to veto the LG-SK verdict,” he said. “Against this backdrop, the two are expected to compromise. In the negotiation, LG would have the upper hand.”