President Biden is counting on the Green New Deal to move the US to less dependence on oil and gas or internal combustion engines as the years go forward. However to allow the transition to happen, building blocks need to be in place. One of the considerations will be the price of battery powered vehicles and one of the building blocks in the vehicle will be the battery. At the moment in Europe one can buy the vehicle and the battery separately, not positive how practical it is, but it is interesting.
In an article by David Shepardson, Hyunjoo Jin, and Heekyong Yang of Reuters, the two biggest South Korean battery makers LG Energy Solutions and SK Innovation agreed to settle disputes over electric-vehicle (EV) battery technologies. The US played a part in the agreement.
The core dispute had threatened the EV plans of Ford, Volkswagen as well as new $2.6 billion plant in Commerce, Georgia for SK Innovation that is key to the growing industry.
The global auto industry is racing to develop EVs and President Biden has proposed spending $174 billion to hike their sales and expand charging infrastructure.
The companies agreed to drop all litigation in the US and South Korea and not to raise any further lawsuits for another 10 years. SK Innovation agreed to pay LG Energy Solutions $1.8 billion this year and next and royalities for 6 years. The US Trade Representative was pleased with the settlements.
Besides the Georgia plant, LG Energy Solutions is building a plant in Ohio and wishes to build a $2.3 billion plant in Tennessee.
Linking to dividend paying stocks, when a company’s values and goals is also the government’s values and goals, the levers of the government can help solve thorny problems. The lawsuit was over 2 years in the making and every year was getting nastier.
There are more questions than answers, till the next time – to raising questions.