U.S. President Biden Faces Key Test On EV Battery Trade Dispute

U.S. President Joe Biden faces a Sunday deadline to decide whether to intervene in a trade dispute between two South Korean electric vehicle battery makers that could impact a Georgia factory and his push for more electric vehicles. The companies, LG Chem and rival SK Innovation Co, have spent months trying to take advantage of past and promised U.S. investments, and ties to politicians.

The Biden Administration, through the U.S. Trade Representative's office, is set to decide as early as Friday whether to take the rare step of reversing the U.S. International Trade Commission (ITC), unless the Korean battery companies reach a last-minute settlement.

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The White House declined to comment on Thursday. The ITC in February sided with LG Chem in its trade secrets claims, but permitted SK to import components for batteries for Ford EV F-150 program for four years, and Volkswagen's North American EVs for two years.

Volkswagen of America CEO Scott Keogh said Wednesday Biden's intervention was critical: "The White House could accelerate the future of zero-emission vehicles and green jobs, or threaten to reduce U.S. battery capacity and delay the transition to electric vehicles."

The global auto industry is racing to develop EVs. Biden has proposed $174 billion to boost EV sales and charging. Unless the White House intervenes, SK says the ITC ruling would force it to halt construction on a $2.6-billion factory in Georgia, where two newly-elected Democratic Senators are the linchpin of Biden's slim Democratic Congressional majority.

Unless the White House intervenes, SK says the ITC ruling would force it to halt construction on a $2.6-billion factory in Georgia

Last month, Republican Georgia Governor Brian Kemp urged Biden to intervene, noting SK's plant will employ nearly 2,600: "Simply put: the livelihoods of thousands of Georgians are now in your hands."

Georgia Senator Jon Ossoff has held numerous meetings with the Korean battery makers and Biden Administration, his office confirmed, and stressed "the urgent need for both companies to come to the negotiating table and agree to a settlement to save the Georgia plant," a spokeswoman said.

LG's battery unit LG Energy Solution is nearing completion of an Ohio cell manufacturing plant with General Motors and is close to announcing plans build a $2.3 billion second facility in Tennessee, sources told Reuters.

LG plans to invest at least $4.5 billion in U.S. battery production over the next four years. LG insists it can handle automakers battery needs if SK abandons its Georgia plant. SK argues LG could not handle VW and Ford contracts and warns Chinese manufacturers may replace lost battery capacity.