United we stand, divided we fall
South Korean battery giants LG Chem and SK Innovation are each trying to sue each other in bitter court disputes in both the USA and South Korea about alleged patent infringements. Now their spat is threatening to disrupt the launches of electric vehicles in the US by some of the world’s largest carmakers. Even the South Korean government is expressing concern.
According to Reuters, U.S court filings show that the embattled firms are trying to stop each other from importing and selling electric vehicle batteries Volkswagen SUVs, as well as Ford pickups, Jaguar’s I-Pace, Audi’s e-Tron GM’s Bolt, and Kia Motor’s Niro.
The dispute started when SK Innovation won a battery contract with Volkswagen in the USA over their larger South Korean counterpart LG Chem in 2018. In April, LG Chem started suing SK Innovation for alleged theft of trade secrets by hiring former LG Chem employees (ongoing). In September this year, SK Innovation launched a counter-suit for patent infringement.
Cho Jae-phil, a professor at Ulsan National Institute of Science and Technology who worked previously at another Korean rival, Samsung SDI said: “Whoever loses the fight would suffer a fatal blow unless the two reach a settlement. This will also be a setback for automakers.”
Although LG Chem is the larger battery producer of the two, neither firm can be described as the underdog in this case: SK Innovation is South Korea’s biggest oil refiner as well as more recently also becoming one of the largest battery makers in the world.
The hard-headed, aggressively competitive nature of the fight is making the Korean government worry that the dispute may damage both firms’ overall reputations, allowing rivals to win market share from South Korean companies. In October, Industry Minister Sung Yoon-mo said that they were watching the dispute closely, wanting to support an outcome that would bring about a “positive outcome for the country overall”.