South Korean battery makers LG Energy Solution and SK Innovation Co. agreed on Sunday to settle disputes over trade secrets dispute, avoiding a potential setback for U.S. electric vehicle (EV) ambitions.

The settlement by affiliates of two of South Korea's biggest conglomerates comes hours before a Sunday deadline for the administration of President Joe Biden to decide whether to take the rare step of reversing a U.S. International Trade Commission (ITC) decision.

The core dispute had threatened the EV plans of Ford Motor Co. and Volkswagen AG (VW), as well as a Georgia plant that is key to the growing industry.

The resolution is a win for Biden, who has made boosting EVs and U.S. battery production a top priority. The global auto industry is racing to develop EVs, and Biden has proposed spending $174 billion to hike their sales and expand charging infrastructure.

SK Innovation agreed to pay LG Energy Solution, a wholly-owned subsidiary of LG Chem Ltd., 2 trillion won ($1.8 billion) – 500 billion won each this year and next, and royalties for at least six years.

The companies agreed to drop all litigation in the United States and South Korea and not raise further lawsuits against each other for 10 years.

"The two companies now can coexist in the global market and compete in good faith," LG Energy Solution said in a statement. SK said it would invest actively both in South Korea and abroad now that uncertainties for its EV battery business in the United States have been dissolved.

Biden's Office of U.S. Trade Representative faced a Sunday night deadline on whether to take the rare step of reversing a U.S. International Trade Commission decision unless the companies had agreed a deal.

In the bitter two-year dispute, LG lost to SK in a bid for VW orders, then accused SK of stealing trade secrets by poaching nearly 80 of its employees. LG filed a complaint against SK in 2019, and both sides hired numerous lawyers and consultants to make their case to the Biden administration.

The administration, Volkswagen and Ford had been pushing the Korean companies to settle, sources briefed on the matter told Reuters.

Trade Representative Katherine Tai was personally involved in the settlement discussions, urging the companies to come to a resolution, the sources said. Her office declined to comment before the agreement was announced in the Asia day.

Ford and Volkswagen were not immediately available for comment outside of business hours.