Refusal to sell SKI to LG considering the withdrawal of battery business from the United States

In the face of LG Energy's steadily pressing on, SKI's power lithium battery business in the United States has been irresistible. Foreign media reported that SKI stated on March 30 that if US President Joe Biden does not overturn a ruling of the US International Trade Commission (hereinafter referred to as 'ITC') before April 11, the company is considering withdrawing its battery business. Out of the United States. On February 10 this year, ITC made a final ruling on the trade secrets and patent disputes between LG Energy and SKI: SKI is prohibited from selling batteries, modules, and battery packs in the United States for the next 10 years. However, ITC allows it to import materials in the next 4 years and 2 years to produce batteries for the Ford F-150 project and Volkswagen's MEB electric vehicle series in the United States. If the two companies reach a settlement, this ruling will be invalidated. However, LG Energy proposed a huge amount of close to 3 trillion won (approximately RMB 17.3 billion) to SKI, which dashed the hopes of both parties to find a way to resolve the dispute in private. This means that SKI's power lithium battery business in the United States will encounter a 'destructive' blow. SKI previously announced a warning that if the final ruling is not overturned, the company will be forced to stop building a battery plant worth $2.6 billion in Georgia. This move may cause some American workers to lose their jobs and undermine the construction of the key electric vehicle supply chain in the United States. Regarding how to deal with the battery factory, SKI said: 'The company has been consulting experts to discuss ways to withdraw its battery business from the United States. We are considering moving the US battery business to Europe or my country, which will cost tens of billions of won.' SKI said , Even if forced to withdraw from the US electric vehicle (EV) battery market, it will not consider selling the Georgia plant to LG Energy Solutions. 'LG Energy Solution In a letter to the US Senator, the intention to acquire SKI's Georgia plant is just to influence President Joe Biden's veto decision.' LG announced without even submitting regulatory documents. The 5 trillion won investment plan (investment plan) does not include location, which means that its important purpose is to combat competitors' businesses. SKI said in a statement. In response to SKI’s condemnation, LG Energy denied it, saying it had no intention of interfering with competitors’ businesses. 'It is a pity that (competitors) condemned our investment. This was announced based on the rise in the US market.' In early March, LG Energy announced plans to invest more than US$4.5 billion (approximately RMB 29.5 billion) by 2025. Expand its battery production capacity in the United States and build at least two factories. Currently, LG Energy has established a battery plant in Michigan, and is co-investing US$2.3 billion (approximately RMB 16.2 billion at the exchange rate at the time) in Ohio to build a battery plant with an output of 30GWh. It is expected by the end of 2022. Put into production. At the same time, GM is also considering the construction of a second joint venture battery plant with LG Energy, and the investment scale may be close to that of its first joint venture. Judging from the current situation, LG Energy's determination to crack down on SKI's power lithium battery business in the United States is relatively firm, while SKI is basically unable to fight back. Withdrawal from the United States may be a high probability event, but it remains to be seen whether it will withdraw to Europe or my country. At present, in addition to the United States, SKI is also building large-scale power lithium battery plants in my country and Europe. Among them, the first battery plant built by SKI in Comerón, Hungary has been put into production, with a planned output of 7.5GWh. In 2019 and 2021, SKI has announced that it will invest US$859 million and KRW 1.3 trillion to build its second and third battery plants in Hungary, with planned output of 9GWh and 30GWh, respectively. In the Chinese market, the battery plant jointly built by SKI and BAIC has been put into production in Changzhou in 2019, with an output of 7.5GWh; at the end of 2019, SKI announced that it will invest US$1.05 billion to build a power lithium battery production base in Yancheng, Jiangsu. The first phase is planned to be 27GWh. In addition, SKI has also established a joint venture with Yiwei Lithium Energy to build a 27GWh soft pack power lithium battery output, further expanding its battery production capacity in my country. Statistics from GGII show that SKI's global installed capacity in 2020 is 4.34GWh, an increase of 184% year-on-year, with a global market share of 3.2%, ranking sixth in the world, and Kia, Hyundai, Volkswagen and other OEMs supplying supporting installations overseas. At present, SKI's installed capacity in my country is still relatively small, and it is still in the early stage of development and construction.