Last week, the International Trade Commission handed down a decision that could hammer Georgia, manufacturing in America, national security, and the country’s ability to move towards driving more electric vehicles.
The decision in a dispute between two Korean battery-makers, SK Innovation and LG Chem, will block SK from making batteries at its Commerce, Georgia factory, which will directly employ at least 2,600 people and potentially thousands more. The siting of the factory in Commerce seems to have spawned a bunch of other electric vehicle manufacturing-related businesses in the area, which might not have much of a rationale to stay open if the factory isn’t working at full capacity.
So, this is bad for thousands of jobs beyond even those at the SK plant and domestic manufacturing. But it’s also bad for national security because failure to produce more batteries here in the US will make the country more dependent on imported batteries from China, and LG Chem—the rival battery maker—has done work with Chinese telecom giant Huawei in the past.
And it’s definitely bad for the manufacturing of more electric vehicles in America. Some people will not care about this, but the reality is that at least two automakers—Ford and VW—have designed their fleets around EVs (and it takes years for automakers to chop and change fleet designs). The ITC decision does allow SK to produce for those two automakers specifically, for a couple of years, but that is really the only carve-out. Right now, more automakers beyond Ford and VW are looking to use SK batteries because LG batteries have been blamed for fires in the cars of Korean automaker Hyundai, as well as in electric buses.
Not only can automakers not just swap LG or other batteries in, instead of SK batteries (cars are built to run on very specific batteries and they are not interchangeable the way a Duracell is with an Energizer). If automakers determine LG batteries are too much of a fire hazard and want to use SK batteries instead, this ITC decision will make it very hard for them to make that switch. (A side note: SK has been accused of stealing LG trade secrets to use in its batteries, but SK batteries have not been accused of catching fire. That may raise some questions about how much intellectual property theft actually occurred here).
The upshot is, it will be hard for automakers to produce the numbers of electric vehicles they are expecting, which in turn means that consumers planning to buy them will be left in the lurch. That includes the US government, which is planning to switch over to more electric vehicles under an ambitious fleet electrification plan instituted by President Biden. It is no joke to suggest that Biden’s climate agenda could be tanked if he does not overturn this decision. It could also cause real headaches for Gov. Brian Kemp heading into a challenging 2022 re-election campaign, and cause headaches for members of Georgia’s congressional delegation on both sides of the aisle.
Here is what Kemp had to say about the decision:
“The International Trade Commission’s recent ruling puts SK’s significant investment in 2,600 clean energy jobs and innovative manufacturing in peril during a pandemic that has created unprecedented challenges and hardship for countless families here in Georgia, and across the country.”
“Litigation in these disputes is always complex, and there are several additional levels of review prior to a final resolution – along with the possibility of a settlement. President Biden and his administration also have the opportunity to support thousands of hardworking Georgians – and their communities – who would benefit from SK Innovation’s continued success in our state. I sincerely hope Georgia’s congressional delegation will join me in advocating for swift presidential action.”
Ultimately, Biden can overrule the ITC here. He just will need to do it soon—within 60 days of the ITC ruling. The question is, will he. Georgia has a lot riding on how he handles this, and we will keep watching.