An ongoing legal dispute between two key battery suppliers to the electric vehicle market could lead to “catastrophic delays,” German carmaker Volkswagen says.
Last year, two Korean battery-makers came to a head when LG Chem sued its smaller rival, SK Innovation, in the US for allegedly stealing trade secrets.
LG Chem’s lawsuit attempts to prevent SK Innovation from setting up shop to produce EV batteries in the US. If this happens, the supply of key components to the American EV industry could be disrupted, Reuters reports. That includes the production of Ford’s upcoming all-electric F150 pickup truck.
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Both Ford and Volkswagen are campaigning with the country’s International Trade Commission (ITC) to allow SK Innovation to continue with its plans to build a battery manufacturing plant in Georgia.
“To avoid a catastrophic supply disruption,” the ITC should let SK Innovation make EV batteries in the US, Volkswagen said in a statement seen by Reuters.
SK Innovation is building its first battery plant to provide for VW’s electric vehicle plant in Tennessee from 2022. The Korean firm is also planning to build a second US manufacturing facility to supply vital components to Ford for its electric pickup among other models. VW’s EV production would also be affected.
Developing the facilities is costing the battery maker in excess of $2.5 billion.
LG Chem says that it could step in and fill the supply vacuum if SK Innovation is barred from working in the US. However, Ford says this isn’t “credible,” due to the short supply of base materials and long development times for EVs.
The legal dispute is also putting US jobs in jeopardy. “The risk to such US jobs is especially unacceptable in light of current economic conditions caused by COVID-19,” Ford said in a public statement to the ITC.
Back in February, the US trade panel hearing the case made a preliminary hearing in favor of LG Chem. The ITC panel is expected to give its final ruling in early October.
Ford is expected to debut its all-electric F150 pickup truck in the next couple of years, all being well — let’s hope that it is.
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