Ford CEO Asks Battery Suppliers to Stop Fighting

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Battery suppliers LG Chem and SK Innovation have what could be politely described as an intense rivalry. With the automotive industry desperate to secure reliable access to the most essential components for the planned electric vehicle offensive, chemical companies specializing in electronics are very much in demand and they’re all jockeying for power.

On Wednesday, the U.S. International Trade Commission (ITC) sided with LG Chem after it had accused SK Innovation of misappropriating trade secrets pertaining to EV battery technologies. But Ford CEO Jim Farley is asking the South Korean businesses to call a ceasefire and settle things out of court, presumably through the transfer of a large sum of money.

Ford cares because the ITC indicated that it would be issuing a limited 10-year exclusion order prohibiting SK’s ability to import certain lithium-ion batteries into the United States. But special exemptions will be made for the company to import the components necessary for their production inside the U.S. and other parts intended for Ford’s F-150 EV program over the next four years. Additional allowances will be made for Volkswagen of America’s planned MEB electric vehicle lineup, though only for two years.

That seems to give sufficient leeway for Blue Oval to get the ball rolling on the all-electric pickup. But Farley took to social media on Thursday to announce that a settlement was the only way the program could continue.

“While we’re pleased the ITC ruling makes way for @Ford to bring to market our groundbreaking electric F-150, a voluntary settlement between these two suppliers is ultimately in the best interest of US manufacturers and workers,” he wrote in response to a Washington Post article about the case.

We’ve been repeatedly confused by how willing the automotive industry has been to let other companies have near-complete control over what is inarguably the most important and valuable component for electric vehicles. In fact, it wasn’t more than two years ago that German Chancellor Angela Merkel was chastising domestic automakers for allowing themselves to become so dependent upon China, Korea, and Japan. But Ford has previously claimed there’s nothing to be gained by building a battery factory, especially considering the swift way in which the industry is currently evolving. While that leaves the company open to losing ground to the handful of automakers that are building their own cells, Ford is hardly the only automaker taking this approach.

“The supply chain has ramped up since Elon [Musk] built his Gigafactory, and so there’s plenty there that does not warrant us to migrate our capital into owning our own factory,” Ford’s last CEO, Jim Hackett, suggested during last summer’s earnings call. “There’s no advantage in the ownership in terms of cost or sourcing.”

Perhaps Hackett couldn’t foresee Ford’s battery supplier losing a court case that would place limitations on its ability to import products into the United States.

Obviously, SK Innovation is displeased with the ITC’s decision. But it issued a reminder that the 60-day presidential review gave an opportunity for President Joe Biden to reverse the ruling. Considering how obsessed the administration appears to be with transitioning toward electric vehicles and moving away from fossil fuels, we suppose there’s a chance. But it wouldn’t be clear how it would benefit America more than having the nation build its own batteries. And wasn’t the Biden-Harris ticket promising an avalanche of new jobs in the energy sector? This seems like a golden opportunity to try and make good on that promise.

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