"Embarrassing" Battery Dispute Criticized by Prime Minister, Is a Last-Minute Agreement Possible?

Prime Minister Chung Sye-kyun is speaking at a Broadcasting Reporters Club debate held on the 28th at the Korea Artists Center in Mok-dong, Seoul.

[Asia Economy Reporter Choi Dae-yeol] Regarding the lawsuits arising domestically and internationally among domestic electric vehicle battery companies, Prime Minister Chung Sye-kyun expressed a message hoping for a swift resolution. He pointed out that as the electric vehicle market is rapidly growing, wasting efforts on trivial matters only benefits foreign companies. With the U.S. International Trade Commission (ITC) ruling scheduled for next month, both companies have not ruled out the possibility of a last-minute settlement. However, due to differing perspectives on the issue and disagreements over the settlement amount, it is expected to be difficult.

At a press club discussion held on the 28th, Prime Minister Chung said, "LG and SK, representative Korean companies, have been in litigation for three years, with costs reportedly reaching hundreds of billions of won," adding, "When these two companies fight, it only benefits others." In the global electric vehicle battery market, LG Chem competes closely with Chinese companies for first and second place, while SK Innovation, despite being a latecomer, has rapidly increased its market share and established itself as a prominent player in the global market.

He warned that if domestic companies continue to engage in wasteful disputes, they may fall behind in competition. Prime Minister Chung said, "It is embarrassing, with even the U.S. political circles urging a quick resolution," and added, "I have contacted the top executives of both companies, asking, 'Aren't you ashamed? Is it okay to cause such worry to the public?' and urged them to resolve the issue quickly, but it has not been resolved yet." He also expressed his desire to quickly create a situation where they actively operate in the broader global market rather than fighting over a small pie.

The lawsuits are broadly divided into two categories. One is LG Chem’s petition to the ITC to ban imports in the U.S. on the grounds that SK Innovation infringed trade secrets, and the other is a civil lawsuit ongoing in the federal district court of Delaware. Since the ITC’s ruling is likely to influence decisions in various lawsuits, attention is focused on how the ITC will decide next month. Unlike in Korea, punitive damages are actively applied in U.S. lawsuits, and LG Chem expects that if wrongdoing is recognized, the compensation amount will be substantial.

Amid the prolonged dispute, the market sees a possibility of a last-minute settlement between the two companies. During the Q4 earnings conference call held the previous day, LG Chem stated, "There is a possibility of settlement before or after the final ruling, and we are doing our best to negotiate" (Yoon Hyun-seok, IR Executive Director).

The key issue is likely the settlement amount and conditions, with reports indicating discussions have been held at the level of several trillion won. Neither company has officially disclosed the settlement amount or conditions. An industry insider said, "It is said that the settlement amount is one of the largest in ITC disputes to date, so it is understood that narrowing the gap in opinions is not easy."