Volkswagen says a South Korean company will be allowed to manufacture electric vehicle batteries at a plant under structure in Georgia that is expected to supply VW’s Chattanooga plant.
The German automaker said allowing SK Innovation to supply batteries to the company would prevent VW from suffering a “catastrophic source outage,” which would cause a delay in the arrival of the company’s electric cars in the United States.
SK Innovation, from the South Korean conglomerate SK Group, opened a new apartment in northeastErn Georgia last year with a $1.67 billion EV battery production plant that would create 2,000 jobs. Last month, the company announced plans to invest another $940 million on the site.
But the Korea Times reported that the U.S. International Trade Commission sided with South Korean company LG Chem, claiming that SK Innovation had attempted to destroy a wide variety of evidence that it had stolen confidential secrets from battery production.
The newspaper said SK Innovation seeks to avoid an embargo on its EV battery products in the United States by reconciliation with LG Chem involving monetary compensation. The commission is expected to take a final resolution in the case on 5 October.
VW Chattanooga is building an $800 million extension where a new SUV will be assembled in 2022.
Marie Gordon, communications director of georgia’s Department of Economic Development, said sk’s overall investment in the state is the largest in more than a decade.
She said the state contributed to the panel on the importance of the assignment to Georgia and the automotive industry.
Gordon said the structure is “progressing well, and guided through the task can see it week after week and month after month.”
Volkswagen Group of America said it does not take a position on the ongoing disputes between LG Chem and SK Innovation.
“However, allowing a recent default judgment … to stand against SKI will have widespread negative, lasting effects on the U.S. energy-efficient automotive industry and the overall U.S. workforce,” the automaker said.
VW said that the action will frustrate the purpose of the United States-Mexico-Canada Trade Agreement (USMCA) by preventing VW from domestically sourcing batteries for its line of EVs for the North American region.
VW said there are less disruptive ways for the parties to resolve of their disputes, and it has asked the commission to allow SK Innovation to fulfill its existing contract with VW to manufacture batteries in the Georgia facility. The automaker said it also has requested to exempt any imported components needed for SK Innovation to operate its Georgia facility.
Contact Mike Pare at [email protected]. Follow him on Twitter @MikePareTFP.