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In the United States VW will no longer be affected by a battery company dispute

VW in the United States

The automaker had warned that there was a severe shortage in the production of electric vehicles.

(Photo: dpa)

Washington, D டுsseldorf Volkswagen And Ford May their electric attack continue in the US car market. Two of the industry’s most important battery cell suppliers settled their dispute in the United States shortly before Sunday’s deadline. The impending downturn in the production of electric cars from VW and Ford was avoided.

Two South Korean cell manufacturers SK Discovery (SKI) and LG Energy Solution have agreed to suspend all legal action in the United States and South Korea. In addition, they avoid taking legal action against each other for the next ten years. SKI will pay $ 1.8 billion in cash and license to LG Energy.

LG has sued its Korean rival SKI for stealing trade secrets. “Both companies can now compete together in the global market with good confidence,” LG Energy Solution announced Sunday.

The legal battle between the two companies began in 2019. SKI had earlier accepted an order from Volkswagen to supply e-car batteries in the US from its biggest competitor, LG. In early 2019, SKI began building a $ 1.7 billion factory in the US state of Georgia.

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From there, the battery cells are to be delivered to the VW plant in Chattanooga (Tennessee State), 200 kilometers from 2022. SKI wants to supply American automaker Ford from Georgia. Both manufacturers had already warned of the consequences of the controversy over manufacturing and jobs in the United States. Had the case continued, SKI would not have continued to build its US factory.

Car manufacturers are relieved to have reached an agreement

Volkswagen plans to produce electric cars for the North American market in Chattanooga next year, so it will depend on SKI distributions. Globally battery cells are so scarce that it is difficult to find new suppliers.

On Sunday, Volkswagen was relieved by a compromise between two Korean cell suppliers. “We are pleased that the two companies have found each other and resolved this trade dispute,” said Scott Keef, CEO of Volkswagen in the United States. With the controversy over battery cells resolved, the US VW subsidiary will now be actively preparing to start production of the first electric cars and will no longer have to look for alternative cell suppliers.

The U.S. government described the decision as a “victory for American workers and the American auto industry.” U.S. President Joe Biden is currently directing plans for a two trillion infrastructure package to improve sustainable energy and future technologies. Battery production is an important building block on the path to energy and kinetic transformation.

The US International Trade Commission (ITC) has backed LG Energy in the conflict between two Korean cell suppliers. The commission allowed Volkswagen and American carmaker Ford to import components for two years to manufacture battery cells in the United States for four years.

US President Joe Biden may have vetoed the demand until Sunday. The U.S. government no longer has to intervene because the settlement is out of court. VW US boss Keef thanked the management in Washington for helping to find a mutually acceptable compromise.

Further: Distribution barriers for chips are getting worse – carmakers need to cut production

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