SK Innovation, LG Chem face legal battle in US
LG Chem CEO Shin Hak-cheol, left and SK Innovation CEO Kim Jun
By Baek Byung-yeul
SK Innovation said Friday that it would pursue a counter suit against LG Chem after the latter filed lawsuits in the United States alleging it stole battery manufacturing trade secrets.
“SK Innovation doesn't need trade secrets of a specific competitor as there are differences in manufacturing and assembly between the firm and its competitors,” the energy business arm of SK Group said in a press release.
“If a rival company does not stop hurling slurs at us without any evidence, we will take all possible measures, against it including legal action,” the firm added.
LG Chem, the country's top battery supplier for electric vehicles (EVs), did not respond immediately, saying, “We hope things will be clarified openly in court.”
The move comes after LG Chem said Tuesday it had filed two lawsuits with the International Trade Commission (ITC) and a U.S. court against SK Innovation over the alleged theft of proprietary information through the hiring of former employees.
SK Innovation refuted the claim the same day, saying it had no manpower drain and all its employees voluntarily sought to work for it.
But LG Chem said Thursday that the legal action against SK Innovation was inevitable to protect core technologies and intellectual property.
In the latest tit-for-tat, SK Innovation stressed that it had no reason to “steal” another firm's battery manufacturing technologies. It said it has invested trillions of won in R&D and will “fight this accusation with a serious response including a countersuit if LG Chem doesn't stop actions discrediting it.”
SK Innovation said that it started to develop batteries in 1996 and has invested trillions of won to secure the world's leading battery manufacturing technology.
“We began mass production of NCM 622 battery cells for the first time in the industry in 2014,” it said.
NCM 622 batteries, which include nickel, cobalt and manganese in a ratio of 6:2:2, have high power density. Unlike its competitor which purchases the NCM 622 lithium-ion battery materials from overseas firms, SK Innovation claimed it has developed its battery manufacturing business by improving on technologies.
It added the firm also developed technology for NCM 811 battery cells for the first time in 2016 and started mass production in 2018. “Given these technological advancements, global automakers are signing more contracts with us,” the firm said.
Analysts said the legal dispute comes amid a leadership race in the increasingly competitive EV battery market.
“It seems LG Chem raised a question about fair competition. With this lawsuit, there might be a supply bottleneck of EV batteries. It also may lead to a tight supply and strong demand over the next couple of years,” Hwang Yu-sik, an analyst at NH Investment & Securities, said.
“Depending on the ITC ruling on the lawsuit, SK Innovation may face difficulties in expanding its battery manufacturing factory in Europe and supplying its batteries to carmakers,” Hwang added. The firm signed an EV battery supply contract with Volkswagen in November 2018 and is also scheduled to supply batteries to Ford.
Among the three EV battery makers in Korea, SK Innovation has the smallest share in the global EV market.
According to data from SNE Research, SK Innovation placed 10th with a market share of 1.7 percent during the January-February period of 2019 while LG Chem was ranked fourth with a 10.4 percent share and Samsung SDI sixth with 3.3 percent.