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Biden avoids big test as battery giants strike deal to save Georgia factories

The Biden administration avoided one of the toughest early tests of its climate program on Saturday when two South Korean battery giants arguing over trade secrets reached a deal to keep a massive factory complex in Georgia open. , according to sources close to the negotiations.

The White House faced a deadline on Sunday to decide to veto a February U.S. International Trade Commission decision that barred SK Innovation from importing materials needed to build batteries from electric vehicles at a pair of $ 2.6 billion factories in Commerce, Georgia.

The case illustrates the new administration’s dueling priorities as it seeks to revive efforts to remove global warming pollution from the US economy while confronting China over intellectual property protections .

As late as Friday night, the company fell short of a deal with Seoul-based rival LG Energy Solutions that convinced the Federal Trade Court that SK Innovation had destroyed evidence of stolen trade secrets. In February, ITC imposed a 10-year import ban on SK Innovation, jeopardizing the supply of batteries for Ford’s F-150 electric pickup and Volkswagen’s Crossover series and threatening the 2,600 jobs it the company planned to fill Georgia over the next several years.

The move also risked delaying President Joe Biden’s plans to electrify the country’s 276 million somewhat bizarre cars, America’s main source of climate pollution.

The deal will also end other ongoing U.S. lawsuits between the two companies, including one in a Delaware federal court that was on hold until the ITC saga comes to an end.

SK Innovation’s plant will account for more than 35% of U.S. electric vehicle battery production capacity by the end of Biden’s first term, when the country is expected to have around 11 large block manufacturing plants. online feed.

SK innovation

A 2020 aerial view of the SK Battery America site in Commerce, Ga., Shows construction already underway.

This would likely force automakers to rely more on batteries made in China, which, in contrast, is building some 100 battery factories.

The settlement, details of which began to leak on Saturday morning, will likely help reverse the decision and allow SK Innovation to keep its factory open.

The agreement is a political victory. Executives from all partisan circles lobbied for a result that would allow the plant to remain open. Georgia Governor Brian Kemp (right) pleaded with Biden to veto the decision if a settlement was not reached. In recent weeks, Senator Jon Ossoff (D-Ga.) Has held at least one meeting to try to negotiate a deal.

But in the end, the looming deadline and high stakes of a decision that should define the future of the near-exponentially growing United States over the next decade led to an eleventh hour deal.

Losing the plant without a deal or veto would have caused a chill in the US battery market as it appears to be starting to attract more players, said Caspar Rawles, an analyst at Benchmark Mineral Intelligence, a London-based research firm specializing in in lithium-ion. electric vehicle batteries and supply chains.

“The message you’re sending to these companies by essentially shutting down a plant in the United States for legal reasons doesn’t send a good message,” he said before the deal was announced. “It’s not the most attractive investment environment for someone looking to spend multibillion dollars, and then there is a risk that something will happen and there is legal intervention and they lose. all.”

A presidential veto would have been a rare decision. The last time the power was used was in 2013, when President Barack Obama blocked an ITC decision that would have prevented Apple from importing some iPads. Ronald Reagan set the record, vetoing four ITC decisions, one of which coincidentally concerned batteries.


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