President Joe Biden‘s groundbreaking electric vehicle initiative has hit a major stumbling block in the form of US trade legislation, requiring him to pick between swing-state employment as well as American intellectual property laws that have been under fire since the Covid-19 pandemic.
In its current infrastructure agenda, the White House set out priorities for electric cars, including converting all publicly purchased vehicles to electric, deploying hundreds of thousands of the charging stations, and providing lucrative customer rebates to get new products out of dealerships. Meeting such targets would necessitate a spike in advanced batteries, which is one problem. Automakers expect to sell over 200 electric or hybrid vehicle models in the United States by 2024, even though no current government programs are implemented. This is in addition to demand from the electric utilities, which are largely relying on similar lithium-ion batteries to keep the grid stable.
A $2.6 billion factory in Commerce, Ga., being developed by South Korean battery manufacturer SK Innovation, is among the factories scheduled to satisfy that requirement better. According to the company, when the plant is finished, it will hire 2,600 people and produce batteries for a variety of Volkswagen cars, as well as the electric variant of the Ford F-150, the nation’s most common car.
However, an ongoing trade dispute is jeopardizing the facility’s development. In February, the US International Trade Commission stated that SK Innovation was liable for stealing trade secrets from LG Chem, a competing South Korean firm, and demanded that SK be barred from importing battery manufacturing components. SK claims the decision would compel it to close the plant, despite the independent agency giving Volkswagen a grace period of two years and Ford a grace period of four years.
This is where the White House enters the image. Under federal statute, the president, as well as the U.S. trade representative, have 60 days to overturn an ITC ruling — April 11 in the battery situation. Carol Browner, who worked as EPA administrator throughout the Clinton administration as well as White House climate chief under ex-President Barack Obama and is now partnering with SK to lobby Biden, stated, “If the president would not disapprove of the ITC vote, I think it’s really hard to imagine SK remaining in the United States.”
For the Biden administration, the choice is particularly difficult. Repealing the ITC policy would encourage SK to complete the plant, allowing the president to brag about protecting thousands of workers in a swing state where he prevailed by fewer than 12,000 votes and where Democrats eventually elected two senators, granting the faction a razor-thin majority.