VW 'unintended victim' in battery supplier dispute, seeks four-year reprieve

VW 'unintended victim' in battery supplier dispute, seeks four-year reprieve

VW 'unintended victim' in battery supplier dispute, seeks four-year reprieve © Reuters. The logo of German carmaker Volkswagen is seen on car in a showroom of a Volkswagen car dealer in Brussels

By David Shepardson

WASHINGTON (Reuters) – Volkswagen AG (OTC:VWAGY) late Friday called itself an "unintended victim" in a battle between two battery suppliers and urged the U.S. government to extend a reprieve to buy batteries key to its planned U.S. electric vehicle production.

The U.S. International Trade Commission (ITC) on Wednesday sided with LG Chem in a trade secrets case, but permitted SK Innovation to import components for domestic production of lithium ion batteries for Ford Motor (NYSE:F) Co's EV F-150 program for four years, and for Volkswagen (DE:VOWG_p) of America’s electric vehicle line for two years.

VW said Friday it will request its carve out be "extended to at least four years to give an adequate transition period. Ultimately, however, it is our hope the two suppliers will settle this dispute outside of the courtroom."

The German automaker has invested $800 million to build electric vehicles in Tennessee and hiring hundreds of employees. "Volkswagen will take all necessary steps to allow us to fulfill our commitment to provide skilled jobs to proud Tennessee workers," the automaker said.

On Thursday, Ford Chief Executive Jim Farley publicly encouraged LG Chem and SK Innovation to reach a settlement. VW and Ford previously warned the dispute could disrupt supplies of the key EV parts and cost U.S. jobs during the COVID-19 pandemic.

Georgia Governor Brian Kemp on Friday called on President Joe Biden to overturn the ITC ruling, warning the long-term prospects for the $2.6 billion SK Innovation battery plant in Jackson County, Georgia, would be "harmed significantly." The plant will eventually build batteries for Volkswagen and Ford.

The White House and SK Innovation declined comment.

LG Energy Solution counsel Dave Callahan said the company "remains committed to negotiating a fair settlement for the theft of its trade secrets" and said the Georgia plant will be able to operate.

"The only obstacle to resolving this matter and securing the plant's long-term future is (SK Innovation's) refusal to acknowledge its wrongdoing and make amends," he added.

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