Essay from NBR Special Report no. 101
Geoeconomics and Politics in Lawsuits on Electric Vehicle Batteries
This essay examines the policy landscape and the extremely competitive nature of renewable energy in the electric vehicle (EV) battery industry in energy cooperation between the U.S. and South Korea.
As digitization accelerates and climate change is increasingly emphasized in the policy agenda, EVs are gaining traction in the transition toward a sustainable future. Washington has high hopes for joint ventures (JVs) between U.S. automakers and South Korean EV battery producers, which have pledged to build new plants for EVs and EV battery manufacturing in the U.S. However, very little policy attention is paid to the limits of cooperation. The case of LG vs. SK that was adjudicated by the U.S. International Trade Commission (USITC) foreshadows the potential legal conflicts looming in the industry in the next decade—not just between South Korean players or even between U.S. and South Korean JVs, but also with Chinese and Japanese players. The complexity of the Inflation Reduction Act raises further concerns that cooperation could become mired in lawsuits without greater policy attention to these challenges.
- Given the business interests that may vary from government policy directions, future conflicts in the EV and battery industries could become litigious.
- The LG vs. SK case at the USITC is a prelude to such cases. Given this prospect, the South Korean legal system may accommodate a system akin to “e-discovery” in the coming years for its firms to conduct litigation at home, diversifying the platform for lawsuits.
- So long as “strategic” trade is preferred to “fair” trade by U.S. policymakers in key industries, including semiconductors, government pressure to line up companies in its favor regardless of jurisdiction may backfire due to the potential mismatch of business and government interests.
June Park is a 2021–22 Fung Global Fellow at Princeton University.