South Korea's SK Innovation beat its larger and fierce local rival LG Chem to a multi-billion dollar deal to supply electric vehicle batteries to German carmaker Volkswagen in the US.
That was last year. With a good amount of media hype, SK Innovation broke ground in March this year with its $1.7-billion factory in Commerce, Georgia, about 200 km from VW's Chattanooga plant, which will be the hub for automakers in the US.
But LG Chem came up with other ambitious ideas.
Stung by missing out on the VW deal and 77 workers leaving for their rival across the Han River in Seoul, LG Chem took SK Innovation to court in the US in April accusing them of misappropriating trade secrets.
Fast forward seven months, the two companies have hit each other in a bitter row with US battery patent infringement lawsuits that threaten to derail the roll-out of electric vehicles (EVs) by some of the world's largest automakers.
American court filings reviewed by Reuters show that the feuding parties are trying to stop each other from importing and selling VW SUV batteries in Tennessee as well as General Motor's Bolt, Ford's trucks, Audi's e-Tron, and Kia Motor's Niro EV.
The ability of Korean firms to supply car manufacturers in the US with batteries is at stake just as the car makers are scrambling to lock in supplies with lucrative contracts ahead of an expected surge in demand, according to court submissions from both firms and several industry experts.
"The company that loses in this battle would suffer a lethal blow unless they reach an agreement," said Cho Jae-phil, a professor at the Ulsan National Institute of Science and Technology who had previously worked with another Korean rival, Samsung SDI.
Jennifer Flake, a Ford executive, disclosed that they encouraged LGC and SKI to resolve their conflict without litigation and believed that multiple suppliers were in sufficient demand.
"We are aware of the issue. We have business continuity plans in place as a normal course of action to protect our interests," Flake told Reuters in an emailed statement.
GM spokesperson Patrick Morrissey said the company was aware of the dispute and no impact on the production of their Chevy Bolt electric vehicle was expected at this point.
Meanwhile, Volkswagen said it's worried that there won't be enough batteries for all the EVs it's planning to launch over the next five years, partly because producers like LGC and China's CATL don't have enough skilled workers for new plants in Europe to quickly increase output.
