Two colossal producers of lithium batteries used for EV have reached an agreement on an intellectual property dispute. The agreement threatened to curtail the supply of batteries needed to step up US production of EV, but the situation has taken a confining u-turn.
The deal reached Sunday between South Korean companies LG Energy Solution and SK innovation will have SK pay LG 2 trillion Korean won, or $1.8 billion. The amount will get apportioned into lump-sum payments and a moving royalty. The deal also gives a huge boost to the production plans of SK in Georgia. The development is set to bring 2,600 jobs which could bolster the sufferings of the people across the state.
The lack of inventory and sustainability could put incremental pressure on battery prices, and keep the cost of EV higher than traditional gasoline cars. The US commission following the ruling has allowed SK to continue selling batteries to Ford(F) for four years and VW for two years to give the automakers to find alternative suppliers. However, President Joe Biden had the chance until Sunday to overrule the Trade Commission’s ruling, but he decided to let the orders proceed.