By ending costly and drawn-out court battles, South Korean EV majors LG Energy Solution and SK Innovation Co. can now ride on ambitious U.S. clean energy agenda and better fend off Chinese competition under U.S. blessing.

Shares of SK Innovation jumped 11.97 percent to close Monday at 266,500 won ($236.68), and LG Chem 0.62 percent up at 817,000 won upon the removal of uncertainties and anticipation of a traction in the U.S. where EV demand is expected to jump from Biden policy in addressing climate change.

The two companies saved President Joe Biden from making an important trade choice that could have destabilized SK Innovation’s $5 billion project in Georgia by reaching a 2 trillion won ($1.8 billion) settlement just before the Sunday deadline.

Biden called the settlement “a win for American workers and the American auto industry.”

The two warring companies had exchanged bitter rants only until recently, but reportedly reached peaceful terms in a CEO videoconference under mediation by U.S. Trade Representative Katherine Tai.

Politicians, finished carmakers and the State of Georgia also have been lobbying hard on behalf of SK Innovation amid fast ascension of Chinese players beyond their home turf.

According to Chinese media, Chinese companies have pledged 22 EV battery projects worth 27.36 trillion won ($24 billion) only in the first quarter.

By ending all court battles at home and abroad and vowing peace for the next 10 years, SK Innovation and LG Energy Solution are now free to concentrate resources to expand their share in North America in addition to Europe backed by their technology edge.

Only Japan’s Panasonic, LG Energy Solution, and SK Innovation have battery cell production facilities in the U.S. SK Innovation can draw additional orders from finished carmakers in U.S. beyond Volkswagen and Ford as the two plants in Georgia will be ready for fully running by next year.

LG, which has yielded considerably for the settlement from its earlier demand of maximum 3 trillion by saving its peer from a 10-year ban at a lower payment in installments to lessen the burden on SK Innovation, will also be able to market its technology strength certified by U.S. authorities and cement leadership by proceeding with $4.5 billion expansion on its own facility in Michigan and JV plant with GM.

Both players having proven their weight in the U.S. are likely to benefit from EV market enlargement in U.S. under Biden presidency. Goldman Sachs estimated EV supplies in the U.S. to reach 2.4 million in 2025, up from 300,000 last year.. In 2030, the total would hit 4.8 million units, and in 2023, 8 million units.

By Won Ho-sup, Choi Keun-do, and Lee Eun-joo

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