Hello and welcome to FREYR Q3 2021 earnings release and conference call. Throughout the call, all participants will be in listening only mode, and afterwards there will be a question and answer session. Today, I am pleased to present our first speaker, Vice President of Investor Relations, Jeffrey Spittel. Please begin your meeting.
Good day, and welcome everyone to FREYR Battery's third quarter earnings conference call. With me today on the call are Tom Jensen, our Chief Executive Officer, and Steffen Foreid, our Chief Financial Officer. During today's call, management may make statements related to our business that are forward-looking under federal securities laws and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to our filings with the Securities and Exchange Commission, which are available on the investor relations section of our website and the earnings press release issued earlier today.
Additional information will be made available in our quarterly report on Form 10-Q for the quarter ended September 30th, 2021, and other reports that we may file with the SEC. With that, I'll turn the call over to Tom.
Thank you, Jeff, and good morning, good afternoon, or good evening, wherever you might be dialing in from. It's a pleasure, of course, for me to be having this second earnings call for our third quarter earnings and to give you important updates on the progress of our business. To just sort of skip through to the most important part. We are experiencing tremendous commercial momentum in the rollout of clean battery solutions worldwide. I'm very happy to be speaking to you today to give you more insight into all the hard work that the passionate and dedicated people at FREYR have been working on since the last earnings call. FREYR is making a significant progress towards our commercialization efforts. We are making commercial and strategic progress across the board.
We're building out the operational foundation to deliver an increasing number of battery cells into an exponentially booming market. We're developing and financing our expansions to scale to basically ensure that we can be relevant for the customers in time. We are today announcing that we're negotiating offtake agreements in excess of 150 GWh in cumulative volumes between 2023 and 2030. This will start deliveries already in 2023 and increase on an annualized basis leading up to 2030. In addition to this, we have a broad and expanding pipeline of opportunities across all market segments, and I'll go into depth around our progress on the customer front. Earlier this year, in October, we announced the joint venture that we have established with Koch Strategic Platforms.
We're progressing in the development of that joint venture, and we'll get back to how we are thinking about expanding capacity expansion to build into this exponentially growing customer base. We are also then accelerating our capacity expansion also in Finland, which we announced in the last earnings call. Both of these, coupled with our progress in Norway, give us a strong and diversified production base to deliver a world-leading battery cell solutions. We are on track with the development of our customer qualification plant, and we're on schedule for starting that up in the second half of next year. We're also very pleased today to announce that we have entered into a supply agreement with Glencore for initial cobalt needs all the way through to 2028.
We will then be making the concept selection, or we have made the concept selection, I should say, for our first commercial facility with a targeted startup in the second half of 2023, and we're now combining the development of Gigafactory 1 and 2, as has been alluded to in previous calls. We are accelerating the debt-based financing solutions to support the final investment decision on that joint development, and we're gonna make that final investment decision during the first half of 2022, being on track for startup production in the second half of 2023, as we previously communicated to the market. Let me go into the overview of our commercial progress. We are basically seeing that the market shortage environment that we have been arguing for some time is being manifested at an accelerating rate.
That gives us an opportunity, generally speaking, to high grade the customer portfolio as we are preoccupied with driving value of the batteries that we produce, as opposed to just producing volumes for volume sake. If I then take you through the funnel of opportunities that we have in the making, we are today announcing that we have two conditional offtake agreements in advanced stages of negotiations. These two are globally leading companies, in the ESS space and in the energy space in general, and the total demand between 2023 and 2030 from these two customers alone exceed 50 GWh of potential demand.
On top of this, we have seven offtake agreement negotiations ongoing, which in total adds an additional 100 GWh of demand potential in the same period on top of the 50 GWh that we now have in final stages of negotiation. We also have a top 25 prospective customer list, and these customers are increasing their demand projections with us every time we speak to them, and we are now in technical review with all of them, all under NDA, and the total need for these customers on aggregate add up to more than 3 TWh of cumulative demand between 2024 and 2030. We don't anticipate, of course, to be able to deliver all of that anticipated demand, but we are increasingly certain that we will be a relevant supplier into that customer base as well.
On top of all of these developments, we have more than 60 prospective customers in addition, many of which are now also under NDA and starting technical review. They are European and U.S.-based predominantly companies, but also select Asian companies that are coming into the U.S. and European markets across the EV segment, the ESS segment, and the mobility segment. Being a provider of clean battery solutions with a diversified production footprint across Norway, Finland, and the United States, with a world-leading technology in 24M is providing a lot of interest in what we are delivering, and we're very happy today to be announcing that we made substantial traction on the commercialization of our offering. Developing a sustainable supply chain is core to having a low-cost decarbonized supply of clean battery solutions.
We're therefore extremely proud to be announcing the cobalt agreements that we've entered into with Glencore. We've contracted up to 1,500 metric tons of sustainably sourced cobalt metal cut cathodes. These will be produced at Glencore's Nikkelverk facility in Norway. We have a joint ambition to reach 100% decarbonization of cobalt and other battery materials, and we will now increase our efforts together with Glencore to look into other supply sources into our battery ambitions in Norway and the Nordic and the U.S. region. This again underscores the importance of having a localized and decarbonized value chain for battery production.
As mentioned many times before, we fundamentally do believe that the success of battery production is a function of having access to low-cost, decarbonized raw materials and then using world-leading technology to convert such raw materials in a low carbon power environment to world-leading battery solutions. This is one important and initial step, which will be followed by many with Glencore and others to develop a fully localized and clean Nordic battery value chain and supply chain. Our roadmap or road to commercialization started, of course, when we had the honor and privilege of listing on the New York Stock Exchange on July 8th this year. Quite a lot has happened since, and it's not that long ago since we actually became known to the battery industry from a listed on the New York Stock Exchange perspective.
Since then, Koch Strategic Platforms and FREYR have announced the formation of our joint venture, and we've also announced that we're investing into 24M Technologies, adding additional exclusivity protection around the technology for deployment in the U.S. We have now made the concept selection, what we refer to internally as Decision Gate two, for our first commercial gigafactory. That is now a combination of what we previously labeled Gigafactory 1 and 2. We're developing that now in one go with increased throughput capacity relative to what we stated earlier. We will then continue to add offtake agreements to the ones that we are indicating today so that we fill up capacity in our Gigafactory 1 and 2, and also add capacity to further capacity expansions.
The visibility we have on offtake today makes us sold out on the first Gigafactory 1 and 2 up until 2030, which then triggers us to accelerate development of additional capacity expansions beyond Gigafactory 1 and 2. We are making the final investment decision on Gigafactory 1 and 2 sometime in the first half of this year. We're optimizing that facility still. We've made the concept selection, and we're still on track to start that up with commercial production of batteries in the second half of 2023. Growth in the U.S. We announced earlier this year an initial ambition of establishing up to 50 GWh of annualized capacity in the United States, clean battery solutions together with Koch Strategic Platforms.
This joint venture leveraged the existing relationship with key potential U.S.-based customers and obviously gives us access to one of the largest private enterprises in the U.S., and their very strong presence across the energy space with logistics, energy competence, building large facilities, and not least, their presence in and connections with core customers and different partners along the value chain for developing large-scale battery solutions in the U.S. We have, together with Koch Strategic Platforms, aligned strategically with 24M Technologies, the technology platform that we will be using to build batteries across all market segments, not only ESS and commercial vehicles, but also across electric vehicle platforms.
This is increasingly a platform which we believe is very strong and deeply competitive relative to conventional lithium-ion battery technology, and we're super excited to accelerate deployment of capacity expansions in the United States together with, again, Koch Strategic Platforms. On top of this, as also mentioned earlier this year, we have entered into initial agreements with the Finnish Minerals Group as well as the city of Vaasa.
We have 90 hectares of prime development acreage just outside the city of Vaasa, which we're now going to accelerate in terms of developing viable value proposition and business concepts to expand capacity also in the Finnish region. This marries up very well with access to localized and regionalized raw materials, which there is plenty of in the Finnish region, in addition to a broad variety of other critical input factors for battery cell production in Norway and Sweden. We are very excited about having an additional footprint in the Nordic region, and that will be another area where we can expand capacity, again, feeding into an exponentially growing customer base. We are on schedule for the customer qualification plant.
As you can see on this picture, the beauty of the 24M technology is that we can establish capacity inside existing manufacturing facilities or inside already established large scale buildings. This is a 13,000 sq m building which we secured earlier this year, and we're on track to install Norway's first large scale lithium-ion battery production facility, which will be an actual industrial scale production line of the 24M technology. All the critical path equipment is scheduled for delivery in the first half of 2022, and we're on track for combining all of those pieces together and starting up production of the 24M-based batteries in the second half of 2022.
As also mentioned, based on the learnings and the insights that we're getting through the customer qualification plant development, we have now decided to combine the development of Gigafactory 1 and 2 into one larger development. We have an 18,000 sq m plot a little bit north of where this building is located, and we are targeting to build out at least eight production lines of the similar size equipment that we're installing into the customer qualification plant. In our communication to investors earlier, we believe that Gigafactory 1 and 2 would have a combined capacity of 13 GWh in actual throughput production annually. We now see, based on the knowledge we have on the production facilities, that we are increasing that throughput capacity quite substantially over and above the 13 GWh that we have mentioned before.
We're proceeding towards the final investment decision. We have made the concept selection earlier this or last week, and we are really excited about moving forward towards the final investment decision of Norway's first commercial gigafactory of double-digit gigawatt hour output. Now on the raw material supply, I've already mentioned the agreement with Glencore, which beyond securing a critically important input through the 1,500 tons of cobalt, also points direction to collaborating with Glencore on other metals and metal sulfates, et cetera, that we need to go into our production. In addition to this, we have already secured five out of the 13 inputs we require to the customer qualification plant through our partner ITOCHU and the sub-suppliers that are already approved suppliers into the 24M process.
The remaining eight is well advanced, and we are on track to ensure that we have sufficient and relevant qualified material to produce the initial batteries in the customer qualification plant. We will be speeding up and accelerating our efforts to localize and regionalize battery cell supply or battery cell raw material supply, I should say, into our gigafactories. The Glencore announcement is one important step in that regard, but we will now be gradually also announcing to the market additional partnerships to basically ensure that we have localized and regionalized and qualified raw materials going into our commercial facilities. We're also well advanced in examining downstream integration.
Both modules and pack partnerships are now in advanced stages of negotiation and discussion, and we will also be adding a module facility coupled with our cell manufacturing facility in Gigafactory 1 and 2. In all, we are expanding our presence up and downstream from the cell manufacturing footprint, and we're seeing that the attractiveness of FREYR as a partner, being both a customer and supplier of clean battery solutions and clean battery raw materials into cell production, is something that is resonating with all of the major players in this space. Let me then just remind our investors about why we are so excited about the 24M technology.
The 24M technology, as all now have come to realize, is an MIT spinoff more than 12 years in the making and have fundamentally revolutionized not only how the battery cells are designed, but also more importantly, how they are produced. The innovative design provides us with an opportunity to build thicker electrodes, which will dramatically reduce material cost and also allow us to put more energy-carrying material into the same volumetric unit of final battery solution. It is highly flexible and can be deployed at multiple different scales across not only the ESS market and commercial mobility market, but also in the EV market applications.
We are very excited about the developments of the technology pertaining to the EV space, and we see increasing interest and attention from the large automotive OEMs around the 24M technology. As also mentioned before, this is a chemistry agnostic or chemistry flexible platform that can feed into the existing supply chains. We can produce NMC batteries, LFP batteries, any known chemistry being used in conventional lithium-ion battery cell production today, while also offering a bridge into future metal anode solutions or solid state solutions over time. The really important innovation in this production platform is that it fundamentally reduces the footprint and the complexity of producing lithium-ion battery cells. We're going from 15 to five production steps.
With that, dramatic reduction in footprint, which is more than an 80% reduction in footprint, 50% reduction in CapEx, substantial reduction in energy consumption and labor cost consumption, provides us not only with an opportunity to provide more cost-effective solutions to our customers, but it allows us to optimize the production of batteries further as we move into the future, where still improved energy densities, improved cycle time, improved charge rates, and not least reduced costs, will be a requirement to basically deliver into the energy transition that is upon us. Finally, this is a more sustainable solution as we will have limited waste in the production, if at all, anything. The ability to recycle any of the production waste we have is dramatically better than that of conventional production.
Since we're not using solvents and binders, but we're using the electrolyte as the solvent and the binder, we basically have a much less chemically sort of, let's call it a challenged final product, which also allows for ultimate recycling to be done in a much better way. We are very happy with our relationship with 24M. This is a step into the future. It offers step change performance and cost improvements relative to conventional production. We are very excited about this technology and very excited about being the company to take it to multiple gigawatt power scale in Europe and United States. Let me now hand it over to our CFO to take you through the third quarter earnings financial aspects before I conclude with some concluding remarks. Steffen?
Thank you, Tom, and good day, everyone. It's a pleasure to be here today. At the end of the third quarter, FREYR had $623 million in cash and cash equivalents on its balance sheet. This is up substantially from the previous quarter, mainly due to the $644 million in net proceeds received from the business combination with Alussa Energy in July. The increase is partly offset by an operating cash outflow, investments in the customer qualification plant, and de-merger payments totaling approximately $33 million in the quarter. Our main financial priority short term is to minimize the use of cash while we build the organization and secure customer offtake. We recruit selectively and manage external costs closely and expect the fourth quarter SG&A expense to be roughly in line with the third quarter.
Medium term, our financial priority is to secure funding solutions that supports the final investment decision for Gigafactory 1 and 2. The plan is to raise financing in the debt capital markets or among commercial banks and export credit agencies. We have engaged banks and have a constructive dialogues with several potential lenders. As we accelerate our efforts to secure financing for the first commercial plant, we will seek a flexible, cost-efficient, and sustainably linked financing solution, allowing for speed and execution and supporting our timeline. Longer term, we will seek to diversify sources of funding and optimize our capital structure as we execute on the strategy. On that note, I'll turn the call over to Tom for closing remarks. Tom?
Thank you, Steffen. To summarize and to sort of take you through our current priorities, we are on track to establish 83 GWh of annualized capacity of clean battery cell solutions by 2028. We can now deploy opportunities not only in Norway, which we're well advanced in developing, but also in Finland and United States. We will be looking into acceleration options for establishing that capacity, building on the knowledge and the footprint that we are establishing in Norway. We see very strong customer traction building, and we are very pleased today to announce initial insights into our customer funnel, which now already have nine customer engagements in offtake agreement discussions, two of which are in very advanced stages.
In combination, these nine agreements add up to more capacity that we are developing in Gigafactory 1 and 2. We will keep adding momentum to that across the ESS and commercial mobility segments, and also expand into the EV market as we're moving towards the final investment decision for Gigafactory 1 and 2 in Norway. It's important for us to diversify our production footprint, and this is also something that our customers are valuing greatly. To have localized production footprint gives opportunity to have security of supply in local markets, which is going to be increasingly important for many of the large companies that we are in dialogue with across the ESS, commercial mobility, and EV spectrum. Finally, we are extremely preoccupied with driving capital efficiency.
as our CFO alluded to, we will be pursuing sustainably linked financing options, and also have a diversified capital base over time. We will optimize plant configurations and supply chain to generate strong returns. Having a localized and decarbonized supply chain is fundamentally important to drive down cost, but also to drive down the CO₂ footprint on the life cycle basis of the batteries we produce, which ultimately is going to be core to the decarbonization of transportation and energy systems globally, the market segment in which we are fundamentally delivering world-leading solutions into. With that, I open up for any questions or comments that any of our investors might have, but we're super excited about the progress to date, and we look forward to keeping you up to speed on a running basis of progress moving forward. Thank you for your attention.
Our first question comes from Evan Calio with Morgan Stanley. Please go ahead.
Hi, all. Evan Calio on behalf of Adam Jonas. I'm curious if you guys could give some commentary on global supply chains, what you guys are seeing. Obviously, it's been in the headlines a lot lately. Curious if there's any risk to that 2H 2022 start for the customer qualification plant, and then Gigafactories 1 and 2. Thanks.
Thank you, Evan. Great to hear your voice again. Very astute question, of course. Not surprised that you're posing it. As I tried to allude to in the presentation, we will be having 13 different suppliers into our customer qualification plant, and all the volumes that we require are secured for five of them, and we are in closing stages with the remaining eight. We don't see any risk of any supply shortage of materials going into the customer qualification plant, which as you know, is scheduled to come on stream in the second half of next year.
Now, truth be told, that is a smaller volumetric requirement of raw materials, and when we move to Gigafactory 1 and 2, scheduled to start production in the second half of 2023, we would obviously need to scale up that supply chain. That is something that we've already started on quite a long time ago, both looking into the existing qualified suppliers and how we can debottleneck and scale up their supply into our facilities. But coupled with that, we are in advanced stages with multiple different parties on the cathode active material side, anode active material side, electrolyte, copper foil, lithium hydroxide, lithium carbonate, anything and everything we need for LFP batteries, NMC batteries for a localized production footprint over time.
So far, we are confident that we're going to be able to either scale up existing suppliers that are approved into the 24M process and/or combining that with localized developments. Be it with existing cathode or anode material providers that are already present in the European realm or Asian suppliers that want to establish presence either in Finland or in Norway. All in all, we are confident that we're going to be able to unlock the raw material supply chain.
As has been pointed out by many people, and stakeholders in the battery industry, this is a fundamentally important area for the whole battery industry to focus on, and we are collaborating with other cell providers and other sort of stakeholders to ensure that timely, and sufficient, raw material capacity is added in time for the battery cells to come online.
That's great. Thank you. One more follow-up, if you don't mind. You know, specifically within the United States, labor's been a big topic lately. Can you give a little commentary on how the hiring has been going and, you know, any overall color on the Norwegian labor market right now?
Thank you for that. Clearly, competence is going to be critical for any business that is scaling as rapidly as ours. Now, FREYR has been in this special situation that, you know, we were, in all earnest, a very startup company at the beginning of the year. We're still a startup company, but we've eight-folded capacity in the last 10 months. That has, of course, required a lot of effort, but it just shows that we have been able to 10-fold our own capacity, be it from a small base, but with relevant competence across project execution, operational excellence, battery cell and product engineering, et cetera. We're continuing that journey to expand our capacity base on a running basis.
Now, when it comes to the U.S., I think it's a little bit too early for me to have any very specific views on this beyond the fact that we have started our joint venture approach together with Koch Strategic Platforms. We populated the initial work leading up to concept selection and ultimate final investment decision for the first gigafactory development for the joint venture in the U.S. sometime next year. We are, of course, leveraging the Koch Strategic Platforms and Koch network as much as we can. We will obviously also now and have started the outreach to various different locations and jurisdictions where we are investigating the potential establishment of capacity. So far the interest in what we're doing is very strong.
We do not underestimate the challenge of attracting the appropriate level of competence, nor do we underestimate the need for us to also educate, let's call it operators from other industries. So far, so good, I would say, Evan. This is a topic that, you know, you should pay attention to, because we are paying attention to it, and we will not underestimate the challenge.
Thank you very much. Our next question comes from Greg Lewis with BTIG. Please go ahead.
Greg?
If your phone is on mute, please take that off so you can ask your question. We will move on to the next question for now. That is from Maheep Mandloi from Credit Suisse. Please go ahead.
Hey, good day, and can you guys hear me?
We can.
Perfect. Thanks for taking the questions and, congratulations on all the, updates here. Maybe if you can just start on the customers over here. Thanks for the clarification on the two in the ESS and the energy industry. Can you just talk about the other seven in early stages, which, end markets do they serve, and, how do you think about kind of the customer, or their customer qualification process, their supply qualification process timelines? Thanks.
Yeah. Great. Let me generally speak about the nine, right? two of them are more advanced and they are in the ESS realm. Among the nine, there is both ESS and commercial mobility customers. It's both LFP, well, predominantly LFP batteries, but also NMC-based batteries. That's why we're also excited about the cobalt agreement with Glencore. Generally speaking, the process is as is with conventional batteries. You go through the ABCD cycle. We already have the opportunity to provide, of course, data from the 24M process, but also sample cells not only from 24M, but also from select sister or brother licensees that we have in Asia. We've also strengthened our relationships with them.
Then as the customer qualification plant comes online, we will obviously go further into the ABCD SOP kind of qualification process with batteries produced on-site. The general nature of the qualification process in the ESS space and in the commercial mobility space is generally shorter and quicker than that of the automotive space, even though there are initiatives ongoing in the EV space as well to try to shorten the timelines of the qualification processes. That is done through a combination of materials, but also through advanced, let's call it algorithmic data modeling and sort of early monitoring of cycle life and performance metrics on the cells as they come out of production.
The sort of final thing I'd like to say about that is, I think it's fair to assume that the 24M production platform is a faster production platform, which allows us to iterate faster and also allows us to generate data quicker. Over time, we do believe that this technology could also enable us to actually shorten the qualification timelines by providing data and comfort around the solutions earlier and quicker than that has been the norm in the conventional technology to date. Again, nine customers, ESS commercial mobility, but then the 25 top customer prospects that come on top of that, all under NDA and all in technical review and discussions as we speak, this also pertains to the EV industry.
We're quite excited about the development, and looking forward to keeping our investors and of course the broader constituency updated about progress on the customer side as we move towards the end of the year.
That was great, Tom Jensen. Thanks for the clarification. If I may just move on to the Giga One and Giga Two. Can you maybe just talk about, like, what's driving that higher throughput? It was interesting, you talked about more than 13 GW. Can you quantify how much that is and what's driving it? I just want to also understand the CapEx needs for the two giga factories combined now.
Yeah. We are moving towards the final investment decision. We will be making the final investment decision in the first half of next year, or sooner rather than later. We need to go through a number of different steps to ensure that we can optimize both the total cost of it in a, let's call it inflationary environment. We're trying to sort of avoid, of course, the worst impacts of that. Anyone with a Reuters screen obviously realized that we have been through a fairly hectic inflationary time, and now certain of the input factors and costs that go into it for us are starting to normalize. We're trying to optimize for the cost structure there. We're not gonna go out with any updated CapEx numbers at this time.
When it comes to the configuration itself, we have made the concept selection. We have been learning quite a lot from the customer qualification plant development and the design phase, if you like, of the casting and unit cell assembly machine, which is the heart of the 25 process, and let's call it relevant upstream and downstream developments that go with that. That has allowed us also to engage in iterative dialogues with our customers, which we've been quite clear on in previous conversations with our investors, that this is an iterative process where we come with this new lithium-ion battery solution, but staying in the existing realm, offering the opportunity to build larger electrodes and better electrodes with more energy-carrying material in it.
That has then allowed us to optimize the size of the cells that we intend to produce. That increase in size of cells, coupled with the increased speed that we think we can implement in the 25 technology, allows us to increase throughput of the combined facility. In addition to this, we are adding a module facility. We're building modules to pack around the cells, which is increasingly important for many of our ESS customers. That module facility is a CapEx-light facility. I mean, relative to the battery cell facilities, but adds roughly 30% in revenue on top of the cell revenue that we will get from the cells. That, you know, improves the margin picture for the totality of the equation.
When it comes to the exact throughput capacity that is gonna come out of it, and we're not ready yet to sort of quantify that specifically, but it is in the double-digit % increase for sure. How much up we're going to end up at is still a matter of optimization. We'll come back to the market when we have more precision around that, which we will be announcing leading up to and concluding with the final investment decision again in the first half of next year.
Got it. That's helpful. Just one last one from me on the cash usage in the near term for Q4, should we expect the same $30 million range for cash burn as well and similar run rate unless until the gigafactories start on a quarterly basis?
Yeah. Generally speaking, as our CFO alluded to in the call, we will roughly have the same SG&A burn in the fourth quarter as we have in the third quarter. Maybe, Steffen, you want to add some color to this so the CFO can comment additionally on this. Steffen?
Yes, I can do that. Thank you. That's correct. Approximately the same G&A in the fourth quarter. I would just like to make the point that in the 30 that includes about almost $10 million in share-based compensation, right? The cash effect is less. Approximately the same level.
Thank you, Steffen.
Appreciate the color. Thanks a lot, guys.
As a reminder, if you do wish to ask a question, please press zero one on your telephone keypad. Our next question comes from Gregory Lewis with BTIG. Please go ahead.
Hey, guys. Sorry, Greg was having some technical issues, but just a quick one for me. Looking at your offtake agreements and your prospective offtake agreements for 150 GWh, is there any way to think about the cumulative demand over a time period? Any way to think about that?
Yeah. Just to be clear, the 150 GWh is a cumulative demand from these nine customer engagements between 2023 and 2030. By 2030 or leading up to 2030, I should say, the total demand actually exceeds the capacity that we aim to produce from Gigafactory 1 and 2 as we see it today. When we couple that with the accelerating momentum that we're seeing from the top 25 customer list, that triggers us to develop more gigafactories as soon as we can in Norway, Finland, and the United States. 'Cause there is.
I mean, the market shortage, as we have been talking about for quite some time, maybe in particular in the ESS and commercial mobility space, is increasingly being manifested, and our customers are increasingly worried or preoccupied with securing supply as quickly as they can, also from localized sources of production. That is a very good situation, of course, from a battery cell producer's point of view, but it also underpins or underscores the challenge that, you know, the battery industry will have moving forward, that a market shortage environment, while positive from many aspects, does, you know, underpin the fact that shortage of batteries can be a function of shortage of raw materials, et cetera, as also alluded to in previous questions. We will now accelerate across the board.
We have had this value chain approach all along, that is now bearing fruits, I should say, both in terms of partnerships establishment upstream from cell production, but also when we're branching out into module and pack partnerships and module production as well with our Gigafactory 1 and 2 development, that is increasing the opportunity to sort of develop tailor-made solutions to a larger extent for our customers. The final thing, having the opportunity to diversify geographically and getting closer to you know the customers, but also having a diversified supply base increases you know the opportunity for us to accelerate development of new capacity. Hopefully that sort of gives some more color to that.
We will be coming back to the market with more specifics around Gigafactory 1 and 2, and obviously subsequent gigafactories in Norway and Finland and the U.S. when we have some more definition around that. That again will be, as it has been to date, iterative processes between ourselves and our customers, our raw material providers, as well as, you know, potential developments of conventional technology in joint venture constructs, in the Nordic region, maybe predominantly. There is very strong interest from conventional Asian battery cell producers to establish partnerships with FREYR, in a local, let's call it Nordic environment, to supply the exponential growth in demand also from the EV producers in Europe.
Because they still rely heavily on imports from Asia, even though there is a number of initiatives on the cell side in Europe. Obviously, not all of them will materialize. We are increasingly being regarded as a credible provider of solutions, and we are getting stronger and stronger by the day. You should expect more in that area also from FREYR moving forward. Right now we are excited about the traction we have around Gigafactory 1 and 2 and the commercial ramifications of that. The 150 GWh that we have under, let's say, advanced and final stages of negotiations as we speak. Again, more than fill up that capacity until 2030. We will be complementing that to then trigger development of new capacity.
Great. Thank you for that. As far as the supply of, you know, your cobalt supply with Glencore for the 1,500 metric tons, is there any way to think about that in the gigawatt hours of battery produced?
Well, I mean, there are basic rules of thumb, right, on this one in terms of how much cobalt you need into NMC 811 type solutions, and it's probably the NMC 811 solution that we will be producing for the customer base in question. We don't want to be very specific on this as of yet. I can say that the cobalt that we have secured is currently sufficient to provide the cobalt needs for the NMC volumes that we aim to produce in Gigafactory 1 and 2. It's not more than just about. That is of course a good starting point for us. We do see a lot of LFP demand coming.
Of course the 24M technology is chemistry flexible, so we can produce both. We will obviously tailor-make production lines to LFP and then tailor-make production lines to NMC. Even though we can swap flexibly between them, we would like to avoid that to ensure that we have the absolute highest uptime in each of the production lines that we have. Right now the cobalt supply is sufficient for the NMC-based volumes that is in our, let's call it offtake agreement definition as we see it today. You know, this will probably also increase. We do believe that NMC will have a role to play also in ESS and mobility and of course EV solutions moving forward, even though LFP is more and more important for a broader variety of market verticals and segments.
All in all, a good step forward on the commercial front, good step forward on the operationalization front, and a good step forward on the raw material supply front.
Thank you. I'll turn it back.
We have no further questions. I hand back over to our speakers.
Well, thank you operator, and thank you everyone for your interest today. We look forward to catching up with you over the remainder of the year, both virtually and now in person on the conference circuit on the road. We'll see you all soon, and please feel free to reach out to us with additional questions and feedback. Thank you very much. This will conclude the call.