SKI PLANT IN COMMERCE

A Dec. 5 aerial photo of the SK Innovation plant being built along I-85 in Commerce to manufacture batteries for electric vehicles. The plant is at the center of a growing legal dispute between SKI and a rival EV battery firm, LG Chem. Both are South Korean companies.

Photo by Joel Logan, Jackson County Government

SK Innovation's $1.6 billion facility being built in Commerce is slated to produce batteries for electric-powered vehicles, specifically for Volkswagen's plant in Chattanooga, Tenn.

But an ongoing legal war between South Korea's SKI and its larger rival LG Chem could undermine both SKI's plans and create turmoil in the international EV market, according to recent reporting from the international news agency Reuters.

According to a Nov. 26 article by Reuters, an upcoming June 2020 International Trade Commission ruling in favor of LGC could "jeopardise SKI's plans to supply VW in the United States with batteries from Georgia..."

Reuters said it had received copies of internal ITC documents which seem to suggest the commission might rule in favor of LGC, accusing SKI of having destroyed or altered evidence in the case.

The background: Both firms have sued each other in U.S. and South Korean courts over patent infringements, Reuters said. SKI told Reuters that "losing the patents case could create 'substantial setbacks' to its battery businesses."

That, in turn, would affect its Commerce facility's plans to produce batteries.

Jackson County officials confirmed that county records related to the SKI facility in Commerce have been requested as part of the ongoing lawsuits between the two battery firms.

LGC first sued SKI last spring, saying SKI had stolen trade secrets and employees in order to win the VW contract and build the plant in Commerce.

Reuters quoted one expert on the EV market as saying that the loser of the LGC and SKI fight would suffer "a fatal blow."

LGC has market power: In another sign the war between SKI and LGC is heating up, LGC has partnered with General Motors to build a $2.3 billion EV battery plant in Ohio, according to the news outlet Axios. That facility was announced Dec. 5.

The move could further boost LGC's standing in the market as GM moves toward more electric vehicle production.

LGC is the world's second-largest EV battery manufacturer with a little over 16 percent of the market in 2018. SKI is not in the top 10 companies and is a relatively new player in the EV battery production.

Not the only fight: The legal war between SKI and LGC isn't the only legal tug-of-war revolving around the Commerce facility.

The amount of funds the company would pay in school revenues (not taxes, but payments in lieu of taxes as negotiated by the county) is of interest to both the City of Commerce and Jackson County School Systems. That's because the facility is located in a "shared tax district" where funds are supposed to be split based on a complex formula dating back to the 1990s.

Exactly how the two school system will divide those dollars has not yet been decided.

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