Speed Race of K-Battery... How Far Have LG and SK Battery Lawsuits Gone?

[Asia Economy Reporter Kim Hyewon] As the Korean version of the 'Green New Deal' policy promoted by the Moon Jae-in administration is unveiled, the 'K-Battery Alliance,' which will play a key role in the eco-friendly economy, has rapidly emerged as a hot topic in the business community. To realize a strong eco-friendly mobility nation, enhancing technological capabilities through healthy competition and cooperation among the three domestic battery companies centered on Hyundai Motor Group is considered crucial.

According to the industry on the 15th, Chung Euisun, Executive Vice Chairman of Hyundai Motor Group, who participated via video conference in the Korean New Deal National Report Meeting presided over by President Moon at the Blue House the day before, mentioned that he recently visited the factories of Samsung SDI, LG Chem, and SK Innovation in succession, stating, "We will cooperate well to get ahead in the global market competition." Executive Vice Chairman Chung discussed new battery technologies with these three companies and praised that it is a source of pride that the world's top three battery companies are Korean firms. To achieve Hyundai Motor Group's vision of "selling 1 million electric vehicles by 2025 and securing more than 10% market share," managing the battery supply chain, a core component, is essential. Hyundai Motor Group's diversification of its portfolio by signing supply contracts not only with LG Chem but also with SK Innovation and even Samsung SDI is a measure to ensure stable supply control.

For domestic companies to leap forward as global leaders in eco-friendly vehicles and batteries, the biggest challenge is to surpass the leading Japanese companies and widen the technological gap by outpacing the rapidly advancing Chinese and European firms. The problem lies in the relatively short history of Korea's battery technology and the limited product range, which commonly results in a manpower shortage. LG Chem's lawsuit against SK Innovation for personnel poaching and trade secret infringement is not unrelated to this environment. Hyundai-Kia Motors' aggressive recruitment of battery experts both domestically and internationally, like a black hole, is also in the same context. Shin Yong-kwon, a researcher at Shin Young Securities, pointed out, "In the past, domestic companies could grow rapidly by absorbing personnel and technology from Japanese firms like Sony, but now domestic companies have to worry about manpower outflow overseas. This is a potential risk factor for Hyundai Motor Group as well."

The lawsuit between LG Chem and SK Innovation has been ongoing for over a year and three months. In April, the U.S. International Trade Commission (ITC) preliminarily ruled in favor of LG Chem, but SK Innovation filed objections, and the ruling is under review. Both companies plan to continue behind-the-scenes negotiations through legal representatives until the final ITC ruling in the U.S. in October. SK Innovation desires an early settlement, but negotiations are slow due to significant differences between the two companies regarding the compensation amount demanded by LG Chem.

Meanwhile, it was recently confirmed that LG Chem filed a complaint against SK Innovation with the Seoul Central District Prosecutors' Office on the 29th of last month on the same charges. LG Chem explained, "It is a kind of opinion letter requesting a swift fact-finding since more than a year has passed since the complaint was filed with the police," adding, "There is no way to present opinions to the prosecution regarding the police investigation, so the complaint was filed in form."

Within the business community and some government circles, concerns are growing that the lawsuit between LG Chem and SK Innovation might negatively affect the national interest enhancement through the K-Battery Alliance. A relevant official from a key government ministry lamented, "The battery industry for electric vehicles is a core future growth engine, and the global race for market dominance is so fierce that cooperation between the public and private sectors is indispensable," adding, "The government mainly supports a smooth agreement, but there is little room to intervene in private companies' management, making mediation difficult."

At the Korean New Deal National Report Meeting held the day before, after Executive Vice Chairman Chung's presentation and a private discussion, President Moon reportedly emphasized the importance of reconciling interests, saying, "The success of the Korean New Deal depends on speed." Blue House spokesperson Kang Min-seok conveyed that President Moon requested the ruling party, government, and Blue House to "proactively coordinate in anticipation of conflicts of interest, as unexpected delays often occur when actually working, and most of the time, interests must be overcome."

This content was produced with the assistance of AI translation services.