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Volkswagen has asked officials here to possibly "mediate" in the ongoing legal battle between LG Energy Solution and SK Innovation (SKI) over electric vehicle (EV) battery-making trade secrets due to concerns the matter could impact the industry's global supply chains, according to sources, Thursday.
"I understand that Volkswagen recently asked the government to intervene in the ongoing legal feud between LG Energy Solution and SKI," an official from the battery industry told The Korea Times asking for anonymity.
Following the request, Cheong Wa Dae asked LG and SK representatives to give it the latest updates on the case, the official said. The specifics of the closed-door meeting are unknown.
Spokespersons for both LG Energy Solution and SKI said the two companies did not meet with government officials on the issue
However, another source said if the meeting took place, it could be interpreted as a "clear message" from global car manufacturers including Volkswagen and Ford that the legal issue should be addressed at the earliest possible date. This is to ensure they can procure a stable supply of EV batteries at a time when the automotive industry is undergoing a paradigm shift from gas-powered cars to EVs.
"At first, Cheong Wa Dae was interested in playing a mediating role between LG and SK, but it is now reluctant to get directly involved as the issue is about intellectual property matters between two private firms," the official said. "Though this is not what the government wants to see, efforts to iron out their differences and reach a settlement would get some support."
LG Energy Solution, which supplies Tesla and General Motors, filed a complaint in the U.S. against SKI in 2019. It sought to block SKI from producing battery cells in the U.S. and importing the necessary components for this. SK has denied any wrongdoing. The United States International Trade Commission (USITC) issued a preliminary ruling in favor of LG in February this year, but both companies are waiting for a final ruling slated for Dec. 10, although officials say a final determination is likely to be delayed.
If the USITC rules in favor of LG, SKI will be unable to manufacture battery cells in the U.S. to supply car makers there. SK is building a factory in the state of Georgia, and both Ford and Volkswagen are planning to buy batteries from the plant for their EVs.
Another official in the local battery industry said the government needs to maintain neutrality in regard to a legal procedure related to trade secrets for fear of setting a dangerous precedent.
"The government needs to stay neutral. If it tries to intervene in the legal tussle between two private firms, this will set a dangerous precedent for business activities of domestic corporations," the official said. "Let's say a Korean company is embroiled in a similar case with a firm based in another country. The foreign country-based company would then definitely try to use any intervention in the on-going case to its advantage," he noted.