Ford Urges Korean Government to Weigh in on LG-SK Dispute
Ford has called on the Korean government to step in to resolve the dispute between LG Energy Solution and SK Innovation.
Ford, a U.S. automaker, has urged LG Energy Solution and SK Innovation to hammer out an agreement to end their protracted electric vehicle (EV) battery dispute, calling on the Korean government to weigh in on the matter.
“LG Energy Solution and SK Innovation should reach an amicable agreement as soon as possible,” Jonathan Jennings, a high-ranking official at Ford, told an online hearing of the U.S. Senate Financial Services Commission on March 16 (local time).
Jennings stressed that Ford has been consistently encouraging the Korean government to come forward to resolve the issue within 60 days.
He noted that if the U.S. International Trade Commission (ITC)’s ruling goes into effect, Ford has to look to overseas suppliers to meet the requirements of the United States-Mexico-Canada Agreement (USMCA) because battery supply in the United States is not enough.
Under the USMCA, which took effect in July 2020, automakers in North America must procure more than 75 percent of parts such as batteries in the United States, Canada, and Mexico to qualify for tax exemption benefits.
Ford could enjoy tax exemption benefits by signing a battery supply contract with SK Innovation, which is building a factory in Georgia, the United States. However, if the ITC’s decision takes effect and SK Innovation’s import of components is blocked in the future, tax burdens will increase.
Earlier on Feb. 10, the ITC issued an order banning SK Innovation from importing some lithium-ion batteries for 10 years. But it allowed SK Innovation to import batteries and parts for four years for battery supply to Ford and for two years for battery supply to Volkswagen. However, Ford and Volkswagen are already busy preparing alternatives.
SK Innovation is eagerly looking forward to President Joe Biden’s decision to veto the ITC’s ruling. Biden is expected to make a decision by April 11.