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16 November 2022

Freyr breaks out of Europe with US $1.7bn production plan

The prospect for Norway’s Freyr battery could hardly be more different than the UK effort into the same lithium ion battery market led by Britishvolt, now on life support, and not expected to make it through to production under its own steam. Freyr by contrast is breaking out into the US, and has already landed key sales deals for supply of LFP battery through to 2030. Britishvolt is more focused on the NMC EV market.

There are a number of European owned battery start-ups, including Spain’s Battchain, Italy’s Italvolt and Sweden’s NorthVolt – but Freyr is the first to land on US shores. The remainder of European battery factories are owned by companies from Japan, South Korea and China.

This week the news was that like so many other battery firms, it would complete the leap to the US market – it has selected and purchased a manufacturing site in Coweta County, Georgia for multi-phase Giga America clean battery manufacturing projects.

It is one of many companies which have made overtures to the US market since the US passed the Inflation reduction Act which offer tax incentives to US based operations – this week alone chemicals group Livent announced an expansion of a lithium hydroxide refinery in North Carolina and chemicals groups Solvay and Orbia, said they jointly plan an $850 million polyvinylidene fluoride plant in Georgia by 2026 to make lithium-ion binders and separator coatings to be used in batteries.

And earlier this week Ford, General Motors and Stellantis NV confirmed they are in talks with South Korea’s Posco Chemicals to invest in plants producing electric-vehicle battery materials in North America, making cathode active materials.

President Joe Biden’s plan has been to unseat China from being the market leading EV supplier, and his IRA act has certainly violently transformed efforts to set up more battery factories on US soil – mostly sponsored by car firms shifting to EVs.

Freyr will use its next-generation SemiSolid Lithium-Ion battery technology developed by 24M Technologies, a Boston based company, and will plow $1.7 billion into the new plant and will kick off with 34 GWh of capacity and then surge again, so that by 2029 it will have spent some $2.6 billion on the plant, and pushed capacity beyond 50 GWh. Freyr expects to create 720 US jobs at the plant. The 24M process cuts multiple steps out of a traditional battery development cycle.

Freyr has bought the land for development of what it calls Giga America which includes 368 acres with options for further expansion. Freyr has options for additional upstream and downstream development projects to take on more of its raw materials processing.

But interestingly Freyr is not going after the US electric vehicle market, this plant will make LFP batteries and it is aimed entirely at growing customer demand for Battery Energy Storage Systems (BESS).

Freyr in August signed a significant deal with Japanese car component firm Nidec, as it shifts sideways into BESS mobile manufacture, most of which sells in Asia and Europe – agreeing a firm deal to supply 38 GWh of LFP Li-Ion battery cells from 2025 to 2030, with options to increase to 50 GWh and to extend the contract beyond 2030. It’s original LFP battery techniques come from a relationship with Aleees in Taiwan, and the 24M process gets it there is fewer materials steps, with lower cost. The resulting package has been tested to be in the top 1% of LFP energy density performance with good safety, i.e. little chance of thermal runaway.

Rethink Energy has gone on record in its BESS report, suggesting that the rapidly advancing US BESS market will switch almost entirely to a mix of LFP and non-lithium technology over the coming 5 years.

In October FREYR also announced supply chain deals with Itochu for materials supply and the one for Aleees for the LFP technology license.

Although Nidec is mostly a car component maker it says that it will grow its business in the fields of generator, battery energy storage systems and battery chargers for EVs, on the back of the deal with Freyr.

But Freyr is still not home free. It has to work through diligence to get final funding for its original Norwegian Giga Arctic in Mo i Rana, with its debt holders, Export Credit Agencies and financial lenders to get credit approvals by 1Q 2023 and complete its financing. So in that respect the current rise in costs of materials for batteries may embarrass it just as much as it has Britishvolt.