SK Innovation fuels LG Chem feud with EV battery patent lawsuit

SEOUL (Reuters) – A feud between two South Korean battery makers escalated on Friday as SK Innovation Co Ltd (096770.KS) stated it plans to sue larger rival LG Chem Ltd (051910.KS) in the US over alleged patent infringement associated to electrical autos (EV).

FILE PHOTO: The brand of SK Innovation is seen in entrance of its headquarters in Seoul, South Korea, February 3, 2017. REUTERS/Kim Hong-Ji/File Picture

The proposed new lawsuit by SK Innovation drew a swift denunciation from LG Chem, which referred to as the motion “groundless” and stated it will search compensation.

The 2 firms have been at loggerheads since LG Chem sued SK in the US in April for alleged theft of commerce secrets and techniques by hiring former LG Chem workers. SK Innovation denied wrongdoing and the litigation is ongoing.

Firing the most recent spherical, SK Innovation stated it was getting ready to file lawsuits towards LG Chem and LG Chem Michigan Inc by the U.S. Worldwide Commerce Fee alleging patent breaches.

SK Innovation declined to offer additional element, together with specifics of when the case can be filed however stated the motion was imminent. The corporate stated a considerable quantity of LG Chem’s battery merchandise had been prone to be affected and a win would prohibit LG Chem from promoting these merchandise.

“These lawsuits usually are not related to LG Chem’s lawsuit towards us accusing misappropriation of commerce secrets and techniques, however they’re rightful lawsuits to guard our mental property,” stated YS Yoon, president of SK Innovation’s battery enterprise, downplaying any suggestion of a tit-for-tat transfer.

In reply, LG Chem stated the deliberate lawsuit was “groundless”, “very regrettable” and “pointless”.

“If the competitor admits its fault, and guarantees to forestall the recurrence with a honest apology, we’ll conform to dialogue when they’re keen to noticeably discuss compensation,” LG Chem stated in an announcement.

SK Innovation inventory was up 6.4% at 0510 GMT. LG Chem gained 1.5%, trailing the market’s .KS11 1.8% rise.

GOVERNMENT INTERVENTION?

The South Korean authorities is nurturing the home EV battery sector to make the trade as huge an export merchandise for the nation as reminiscence chips and show panels.

A supply with direct data of the matter stated there was concern the lawsuits may weaken native battery makers at a time of heightened international competitors. These worries meant the federal government might act as mediator to safe a swift decision, the supply stated, requesting anonymity as a result of sensitivity of the matter.

SK Innovation additionally stated it plans to file a separate U.S. lawsuit towards LG Electronics Inc (066570.KS), one other affiliate of LG Group, claiming unauthorized patent use in EV battery manufacturing.

LG Chem makes battery cells within the U.S. state of Michigan, which LG Electronics makes use of to make completed batteries close by.

SK Innovation, South Korea’s greatest oil refiner, is a latecomer to an EV battery market led by LG Chem and Samsung SDI Co Ltd (006400.KS) in addition to Japan’s Panasonic Corp (6752.T). It began mass manufacturing in 2012 with prospects together with Germany’s Daimler AG (DAIGn.DE) and Volkswagen AG (VOWG_p.DE).

Reporting by Heekyong Yang and Ju-min Park; Modifying by Christopher Cushing and Jane Wardell

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Exclusive: Toyota sees new business opportunity in leveraging hybrid tech

TOYOTA CITY (Reuters) – The head of Toyota Motor Corp’s electric vehicle (EV) business told Reuters the automaker has received enquiries from more than 50 companies since announcing last week that it would offer free access to patents for EV motors and power control units.

A Toyota Mirai fuel cell vehicle awaits final inspection at a Toyota Motor Corp. factory in Toyota in Aichi Prefecture, Japan, April 11, 2019. REUTERS/Joe White

The executive also said Toyota aims to use partnerships to cut by as much as half the outlays for expanded electric and hybrid vehicle components production in the United States, China and Japan.

“Until now we have been a tier 1 automaker, but now we also intend to become a tier 2 supplier of hybrid systems,” Toyota Executive Vice President Shigeki Terashi said.

Supplying rivals would greatly expand the scale of production for hardware such as power control units and electric motors that are used in gasoline-electric hybrids, plug-in hybrids, fully electric vehicles and fuel cell vehicles, he added.

Toyota last week outlined plans to offer automakers and auto suppliers royalty-free access to nearly 24,000 electrified vehicle technologies patented by the Japanese auto giant.

In an interview on Thursday at Toyota’s global headquarters in Toyota City, Japan, Terashi provided new details of Toyota’s strategy, and its anticipated impact on the company’s investment plans.

By offering to supply rival automakers with parts used in Toyota’s gasoline-sipping hybrid vehicles, the Japanese automaker sees a way to slash capital outlay by roughly half for new plants required to build electric car components for future models, Terashi said.

“We believe that this approach will reduce investment costs significantly,” he said.

Terashi said Toyota projects a surge in demand for electrified vehicles globally as regulators insist new vehicles emit substantially less carbon dioxide, and that working with Toyota would offer others a low-cost path to compliance.

Toyota’s internal goal is to sell 5.5 million electrified, Toyota-brand vehicles annually by 2030, up from about 1.6 million vehicles now, he said.

Already, Terashi said, Toyota believes it could reach the 5.5 million target as early as 2025. The company is working on plans for a new round of capital spending to expand capacity for producing the hardware required.

By offering to supply electric vehicle hardware, and the know-how to integrate it into vehicles, Terashi said Toyota wants to reduce its capital outlay, and create a new source of revenue.

“We anticipate that there will probably be very few automakers who use our patents to develop their own hybrids from scratch, so by using our system and our components, and offering our support, we can work together to develop these cars,” Terashi said.

In the last 20 years, Toyota has managed to dominate the global market for hybrid cars by constantly improving and lowering the cost of the technology it pioneered in the Prius – and keeping this expertise a closely guarded secret.

Toyota’s new business foray underlines the challenges facing even the largest global automakers as they confront some of the most profound technological changes for automobiles in a century.

Toyota is now trying to take advantage of its lead in refining hybrid vehicles, even as it runs behind global rivals such as Volkswagen AG and Tesla Inc in bringing fully electric vehicles to showrooms.

Since pioneering the Prius in 1997, Toyota has sold more than 13 million hybrids, which twin a conventional gasoline engine and electric motor, saving fuel by capturing energy during coasting and breaking and using it to power the motor.

Roughly 15 percent of Toyota’s annual global sales are hybrids, including the Corolla and the RAV4. Last year it sold 1.6 million hybrids globally, more than the 1.3 million all-battery EVs sold by Tesla Inc, Nissan Motor Co and all other automakers combined.

To meet the expected surge in hybrid demand, Terashi said he is planning to increase production capacity for hybrid components mainly by adding capacity at existing plants.

Toyota has initially courted its partner automakers. It already supplies the plug-in hybrid system for Subaru Corp’s Crosstrek SUV crossover model, and last month Toyota announced that it would be a global supplier of hybrid systems to compact car maker Suzuki Motor Co.

Workers install the fuel cell power system in a Toyota Mirai at a Toyota Motor Corp. factory in Toyota in Aichi Prefecture, Japan, Apriil 11, 2019. REUTERS/Joe White

The success of the Prius has helped to brand Toyota as a maker of affordable, reliable green cars and has been key to the automaker’s reputation as a leader in low-emissions vehicle technology.

Terashi brushed off the risk that Toyota could lose this edge by offering its hybrid technology to other automakers, arguing that it held a crucial, 20-year head start over its rivals.

“Even if an automaker is able to develop and produce a car using our systems and parts which complies with emissions regulations, its overall performance would never be the same as ours,” he said.

Reporting by Naomi Tajitsu and Joseph White; Additional reporting by Maki Shiraki; Editing by Christopher Cushing

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Toyota, Panasonic to set up EV battery JV in 2020: source

TOKYO (Reuters) – Toyota Motor Corp (7203.T) and Panasonic Corp (6752.T) are set to launch a joint venture next year to produce batteries for electric vehicles (EV) in an effort to compete with Chinese rivals, a source familiar with the matter said.

Toyota Motor Corp President Akio Toyoda (L) and Panasonic Corp President Kazuhiro Tsuga attend a joint news conference in Tokyo, Japan, December 13, 2017. REUTERS/Toru Hanai

The joint venture, to be owned 51 percent by Toyota and the rest by Panasonic, could also provide batteries to Toyota’s EV technology partners Mazda Corp (7261.T) and Subaru Corp (7270.T), the source said on Sunday.

The source declined to be identified because the talks on the joint venture are private.

A joint venture would build on the agreement that the pair announced in late 2017 on joint development of batteries with higher energy density in a prismatic cell arrangement.

Toyota and Panasonic each said the plan to set up a joint venture, first reported by the Nikkei business daily on Sunday, was not what they have publicly announced.

A Toyota spokesman said the two companies have been working on the battery partnership announced in 2017. Panasonic made the same comment in a statement.

Under a planned joint venture, Panasonic would shift most of its prismatic battery-related equipment and facilities in Japan and China to the joint venture, while those producing batteries for U.S. EV maker Tesla Inc (TSLA.O) will remain under the company, the source said.

Panasonic already makes prismatic batteries for Toyota, whereas for Tesla, it makes cylindrical batteries of a type similar to those used in laptops.

The two companies may announce the joint venture plan as early as this week, according to the source.

The battery joint venture will help Toyota achieve an annual sales target of around 1 million zero-emission battery EVs and fuel-cell vehicles (FCVs) by 2030.

It will also give Panasonic cost and scale advantages in battery production at a time when China’s Contemporary Amperex Technology has grown to be on par with the long-time industry leader on the back of the rapidly growing home market.

Reporting by Makiko Yamazaki and Maki Shiraki; Additional reporting by Takashi Umekawa; Editing by Michael Perry

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