Trade Secrets War Sparks Problems For Electric Car Makers

Warring companies threaten to hold up the launch of a new generation of electric vehicles by many of the world’s largest car makers.

The two South Korean firms – LG Chem and SK Innovation – are battling toe-to-toe in US courts to determine which of them owns the rights to electric battery technology.

And the winner takes all – in this case that’s a huge slice of the global market.

In court, LGC claims SKI could only win a contract with Volkswagen after poaching staff and their knowledge of LGC’s trade secrets to produce components for the batteries.

Now, LGC is urging the courts to stop SKI bringing batteries and components based on stolen technology into the US. SKI denies the claims.

Battle for market share

The courts are not expected to make a decision until October 2020, meanwhile, an interim ruling is likely to go to LGC, reports suggest.

Besides Volkswagen, other car firms are caught in the fall out include General Motors, Ford, Jaguar, Audi and Kia.

Both companies are competing for lucrative contracts to lock in as suppliers to the carmakers in anticipation of a huge leap in demand as governments ban petrol and diesel engines as part of their energy conservation programs.

Ford spokeswoman Jennifer Flake explained the corporation was encouraging LGC and SKI to resolve their conflict outside the courts and that the market was large enough to support more than one supplier.

$165 billion market at risk

“We are aware of the issue. As a normal course of action, we have business continuity plans in place to protect our interests,” she said.

GM spokesman Patrick Morrissey confirmed the company was aware of the dispute and but did not expect any knock-on to the production of the Chevy Bolt electric vehicle.

LGC is forecast to be the biggest electric vehicle battery producer by 2025, with SKI generating about half the number of units of its rival.

The market is expected to grow to by nearly a quarter each year to reach around $165 billion by 2025 – even bigger than the market for memory chips, which is likely to be worth $150 billion.