Summary：SKI is considering withdrawing its battery business from the United States, possibly to Europe or China.

In the face of LG Energy’s steadily pressing, SKI’s power 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 will consider withdrawing its battery business. 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 filed a huge claim of close to 3 trillion won (approximately RMB 17.3 billion) to SKI, dashing the hopes of both parties to find a way to resolve the dispute in private. This means that SKI’s power battery business in the United States will encounter a “destructive” blow.

SKI previously issued a warning that if the final ruling is not overturned, the company will be forced to stop building a $2.6 billion battery factory 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 the battery business from the United States. We are considering relocating the US battery business to Europe or China, which will cost tens of billions of won.”

SKI said that even if it is forced to withdraw from the US electric vehicle (EV) battery market, it will not consider selling its Georgia plant to LG Energy Solutions.

“LG Energy Solutions, in a letter to the U.S. Senator, intends to acquire SKI’s Georgia factory. This is only to influence President Joe Biden’s veto decision.” “LG announced without even submitting regulatory documents. A 5 trillion won investment plan (investment plan) does not include location, which means that its main purpose is to combat competitors’ businesses.” SKI said in a statement.

In response to SKI’s condemnation, LG Energy denied it, saying that it had no intention of interfering with competitors’ businesses. “It’s a pity that (competitors) condemned our investment. This was announced based on the growth of 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 to expand its battery production capacity in the United States and build at least two factories.

Currently, LG Energy has established a battery factory 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 factory with a capacity of 30GWh. It is expected by the end of 2022. Put into production.

At the same time, GM is also considering building a second joint venture battery plant with LG Energy, and the investment scale may be close to that of its first joint venture plant.

Judging from the current situation, LG Energy’s determination to crack down on SKI’s power 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 China.

Currently, in addition to the United States, SKI is also building large-scale power battery plants in China and Europe. Among them, the first battery plant built by SKI in Comeroon, Hungary has been put into production, with a planned production capacity of 7.5GWh.

In 2019 and 2021, SKI has successively announced that it will invest USD 859 million and KRW 1.3 trillion to build its second and third battery plants in Hungary, with planned production capacities of 9 GWh and 30 GWh, respectively.

In the Chinese market, the battery plant jointly constructed by SKI and BAIC has been put into production in Changzhou in 2019, with a production capacity of 7.5 GWh; at the end of 2019, SKI announced that it would invest US$1.05 billion to build a power battery production base in Yancheng, Jiangsu. The first phase plans to 27 GWh.

In addition, SKI has also established a joint venture with Yiwei Lithium Energy to build a 27GWh soft pack power battery production capacity to further expand its battery production capacity in China.

GGII statistics show that in 2020, SKI’s global installed electricity capacity is 4.34GWh, an increase of 184% year-on-year, with a global market share of 3.2%, ranking sixth in the world, and mainly providing supporting installations overseas for OEMs such as Kia, Hyundai, and Volkswagen. At present, SKI’s installed capacity in China is still relatively small, and it is still in the early stage of development and construction.