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14 October 2021

Koch drifts closer to Norway’s Freyr on 24M US plant

Norwegian battery start up Freyr, already public in the US through a SPAC (special purpose acquisition company) and a PIPE (private investment in a public company) which raised it $704 million, has fallen in with the bad lot which is the coal industry, or rather the investment arm of the infamous Koch Brothers – Koch Strategic Platforms.

Freyr has been saying to anyone who would believe it that it was planning to build an enormous – some 43 GWh of battery cell production capacity by 2025 and around 83 GWh by 2028. Now we can see where 50 GWh of that is coming from, this partnership with Koch, and another release of $70 million between them into US battery design firm 24M, for a US license to its technology. The idea is to reach 50 GWh of annualized capacity by 2030 in the US with a Final Investment Decision for the first Gigafactory during 2022.

It is now officially looking for a site for the plant to build batteries for both the grid and for Electric Vehicles. The $70 million will go jointly into 24M, half each from Freyr and from Koch. 24M is an MIT spinoff.

The 24M manufacturing process is said to use traditional lithium-ion materials, but cuts 50% in Capex from conventional manufacture, and lower manufacturing costs. The semisolid technology is claimed to deliver more active material per volume and is more reliable and safe than conventional lithium ion.

The deal also allows for some equity ownership in 24M although the statement did not say how much. This joint venture will also evaluate advanced battery technologies for future commercialization between Koch Strategic Partners and Freyr.

24M first took investment from Freyr 12 months ago and it is known for its SemiSolid technology with reference to reaching a solid state lithium ion design which simplifies the production process, and allows for thicker electrodes.

For a company renowned for investing in fake academic studies which supposedly proved that global warming was NOT a thing, the Koch Brothers empire, which mostly came from US coal investments, has been rather clear on clean tech investments of late, specifically during 2021.

Last month Koch invested $100 million in battery recycling company Li-Cycle and in July took part in a $540 million round in Microvast, another lithium ion battery maker which already has manufacturing sites in the US, China and Germany. Koch this year has also put cash into REE Automotive, part of a $300 million round, an electric vehicle platform which claims to have signed up multiple Tier 1 automotive partners.

Also in July Koch invested in Eos Energy Storage in a $100 million round. We covered this earlier in the year when Eos licensed Babcock & Wilcox for its entire global customer base for the Eos Znyth zinc battery storage system. Eos also landed an order for 1 GWh of standalone energy storage to operate in the ERCOT market in Texas to be delivered this quarter as it ramps to making 500 MWh of battery this year and 1 GWh next year.

Koch took part in Freyr’s last debt round and outside clean energy Koch has taken investments in health technology group Cue and 5G software firm Mavenir this year.

Freyr released results for Q2 in August when it alluded to a potential US deal, and announced a final investment decision to go ahead with a plant at Mo i Rana in Norway. It also said it had lined up Finnish Minerals Group for part of its logistics pipeline. Its CQP plant in Norway (Customer Qualification Plant) will be up and running during 2022. Freyr lost just $8 million on the quarter and retained cash and cash equivalents of $652 million.

The CQP plant is to take 24M batteries for testing of materials and cells, training of staff, and the supply of samples to potential customers. In the quarter Freyr also signed a contract with Mpac Lambert for casting and unit cell assembly equipment for the battery cell production line.