Global credit rating company Standard & Poor’s (S&P) said on the 17th that SK Innovation’s (BBB-negative) decision by the U.S. International Trade Commission (ITC) to ban electric vehicle battery business in the U.S. for 10 years will further reduce credit rating maintenance. Looked out.
On the 11th, ITC raised LG Chem’s hand in a trade secret infringement dispute raised by LG Chem against SK Innovation. ITC then announced that SK Innovation will ban battery sales in the US market for 10 years. However, for supply to Volkswagen and Ford, grace periods of two and four years were allowed, respectively.
S&P said, “With this ruling, the prospect of recovering investments in two electric vehicle battery plants under construction by SK Innovation’s investment of about $3 billion has become quite uncertain.”
S&P said, “The US President can veto within 60 days of the decision of the US International Trade Commission, and SK Innovation can appeal to federal court.”
“Even though the EV battery business is growing rapidly, 10% of total sales and a slight operating loss are expected for the next two years. The two are expected to start mass production in the first quarter of 2022 and the first minute of 2023, respectively, and the battery business can proceed as planned during the grace period of the next two to four years.”
S&P said, “There is a possibility that LG Energy Solution and SK Innovation will reach an agreement, but it is difficult to determine the terms of the agreement at this time.” “The financial leverage ratio of SK Innovation is due to weakening demand for oil and petrochemicals and expanding investment in the electric vehicle battery business. It will remain high for the next 12 months.”