Everybody, to FREYR's First Capital Markets Day. I'm Jeff Spittel, I run investor relations. I'll be your host today. It's great to see a lot of familiar faces. Many of you have been with us from the start of our journey as a public company or even before that. We're incredibly grateful for your support. It's because of you that we're here today. Also, like to say hello to our listeners and watchers on the live stream around the world. Thanks for your support. Thanks for your interest. We know that a lot of you are investors in the company, too, so we appreciate you joining us today. Before we get started, like to do a few housekeeping items, if I may. First, just a word from the legal department as well as SEC counsel. We will be making forward-looking statements today.
You're all familiar with the disclosure language, but I'd encourage you to review that language in our SEC filings and other materials. With that, let's talk about our agenda. We've got a pretty jam-packed agenda for you today. It's going to feature comments from our management team, both here from the New York Stock Exchange, as well as the team in Mo i Rana. Jan Arve, our COO, and the team will be coming to you live from the CQP, and we're also gonna be staging a virtual tour. We're pretty excited to share a lot of new news with you that we released, if you got a chance to review our press release earlier today. Let's get to it. We're not here to listen to me. Without further ado, I'll turn it over to Tom Einar Jensen, our co-founder and CEO. Tom?
Thank you, Jeff. It's an honor, of course, to host our inaugural Capital Markets Day, with our investors, partners, people tuning in, government representatives, families, and whatnot. It's, of course, very good to be back at the New York Stock Exchange, little under two years after we went public via SPAC acquisition, as a startup company in the battery space. Thank you to our friends at the New York Stock Exchange for taking excellent and professional care of us. Being a listed company is very hard, you're making it a little bit easier for us by being such excellent hosts for us. Very strategic pillars, as I've mentioned to many of you previously, speed, scale, and sustainability, we stay true to these principles.
Let me run you through a little bit of what that means. Eight days after we went public, on July 8, 2021, we made the first investment decision in the facility you see on the screen behind me. In 20 months later, we started operations in the same facility. We started essentially the commissioning of that facility to demonstrate the cutting-edge, next-generation, SemiSolid production platform, which we'll take you through in more detail today. We did this in the middle of a pandemic, with supply chain disruptions, war in Ukraine, inflationary pressures, and a whole range of other challenges. Today, we are announcing that we have achieved our most important milestone to date. We have assembled, charged, and discharged our first couple of batteries. We're now moving from emerging or sort of aspiring to become a battery company.
I've been saying to our investors previously that we're starting to look like a battery company, now we actually are a battery company. We are producing batteries. This is, of course, an extremely important milestone for us as we move forward in our journey. Let me now take a moment to reflect upon the context in which we find ourselves. The energy transition is, of course, all around us, which everyone here is acutely aware of. Day by day, month by month, and year-over-year, more and more are realizing that batteries are at the center of this transition. Batteries are included in absolutely everything that can be electrified and decarbonized. More than 70%, 75% of everything that will be electrified have batteries included in some way, shape, or form.
You could argue that batteries scaled in a profitable and cost-effective manner is the most important technology to catalyze the energy transition. We stand in front of one of the largest secular shifts in mankind's history, and governments around the world are increasingly realizing that we are way past over time in this transition. This is a dire situation from a climate mitigation point of view, but it's also quite important from a commercial development point of view, because when this realization starts to emerge, it manifests itself into increasing government intervention and government support for scaling up capacity. Let me put that into a little bit of context. Today, there is roughly 1 TWh of capacity, battery capacity globally, and it's increasing quite fast.
By 2030, if we're going to stay roughly in line with the Paris Agreement and other climate agreements, which of course, governments around the world are increasingly understanding that they need to do, we need to four to seven-fold that installed capacity in seven years. Depending a little bit on who you ask, estimates vary a little bit, some say 4 TWh by 2030, others go as high as 7 TWh. Irrespective of that, it's a 4x-7x challenge of what has taken 30 years to establish, largely in Asia. That's a 30x-50x challenge, and it will not happen absent deep public-private partnership relationships.
This is why we are quite encouraged by what we're seeing around us with the Inflation Reduction Act and different responses from European governments, including from the Norwegian government, which we'll also come back to later today. This is then what China realized 20 years ago, and that is why China is by far the leading country when it comes to clean energy technologies. This is what the U.S. really realized last year when they announced the Inflation Reduction Act, which is the core catalyst for mitigating climate change on the planet right now, and the benchmark for what other governments can do and should do to really sort of support the increasing energy transition.
Today, you will hear from the Minister of Trade and Industry in Norway, how Norway will support the battery industry in general and FREYR in particular, and this is based on the national battery strategy in Norway, which was launched at the Giga Arctic site roughly one year ago today. The dire realities of climate change is manifesting itself in increasingly harsh ways, and as this continues, and it will continue, unfortunately, more and more incentives will be put on the table to ensure that capacity can be scaled rapidly. That's not only battery cell manufacturing capacity, that is the entire battery value chain. It needs to be regionalized to a large extent because this becomes a backbone of critical energy infrastructure.
For a company that is able to actually build, operate, execute, and sell profitable solutions in the battery space, it is the most significant and supportive backdrop that any company can have in the history of mankind. What we really need to do as FREYR is to continue to prove our capabilities and to demonstrate that we can do what we're saying we are going to do. We're going to build, we're gonna execute, we're gonna operate, sell, and recycle cost-effective and clean battery solutions to the backdrop that I've just been through. My excellent colleagues here will take you through our commercial progress, what we're doing on the commercial front and the financing front, and on the customer front.
My excellent colleagues in Mo i Rana, which are streaming in a little while, will take you through the Customer Qualification Plant and how next-generation cutting-edge battery technology is manifesting itself as we speak. Let me take you a little bit through, for those tuning in who might not know us as much, a short sort of history of FREYR and where we are and where we're going. FREYR was inspired by Northvolt, the Swedish battery company, that in 2016, 2017, started to show that it's possible to establish battery companies in the Western Hemisphere, and it's possible to raise large amounts of capitals to do that. As good Norwegians, we tend to say that if the Swedes can do it, we can do it a little bit better.
More importantly, we really started to investigate, is there sort of a sound basis for battery production in Norway? Norway has a proud industrial history, energy-intensive and energy-related industry. We have a 100% renewable energy backbone, which is also very low cost. From an energy-intensive industry point of view, it made a lot of sense to establish the industry in Norway. Now, having that century-long experience in producing energy and energy-intensive products and the developed process-intensive industries, which really focuses on high uptime, high yield, high regularity in production, high speed of production, et c., we felt we needed something more. We needed to complement that intrinsic advantage with a cutting-edge technology.
That is what we're going to focus a lot on today, how we're taking this next generation lithium-ion battery technology to scale with the benefits that comes with it. We are a company that is technology flexible, so today we are also going to announce to you that we are expanding our technology focus to include also conventional footprint. We've partnered with a top-tier Asian battery manufacturer to really also add and complement the 24M technology suite, and we'll take you through that as well. All battery companies, they fight for or compete for capital, competence, and customers. Not everyone will make it in this industry. There is a lot of startup companies in this space, and it's notoriously hard to succeed.
Customers are demanding continuous improvements in the products, increased energy densities, lower costs over time, efficient solutions, et c.. So far, knock on wood, we have been able to be competitive across all of these verticals. Yesterday's news are not sort of important for the future, so we continuously need to sort of deliver on our promises if we're going to be the battery champion that we aspire to be. We are now moving from being a PowerPoint company to becoming a battery company. We have operating assets. We're starting the journey of what some label production hell to really start to hit down the challenges of producing what is notoriously hard. FREYR think hard is a good thing. If this was easy, a lot of people would do it, so we're actually seeking up hard, and we are pushing boundaries.
When we're pushing boundaries, we're bound to make mistakes, and we will be honest about the mistakes we make, but it's not allowed in FREYR to make the same mistake twice. We are progressing forward. As I mentioned, less than 20 months after we made the first investment decision, we're actually operating our facility. Less than two years after we built it, we are producing, assembling, and charging and discharging batteries. It's a great day for us to be announcing this to our investors here. We started FREYR rooted in attracting part of the knowledge base that the Norwegian energy and energy-intensive industry has to offer. These people are deeply experienced people who have built, operated, and run very large energy and energy-intensive operations. They've been out, as we say in Norway, winters night before.
We have a DNA in the company to really seek up challenges. To be fair, we knew little about the challenges that lied ahead of us when we started the company. But we did know how to solve problems, and that is what we've done, and I'm extremely proud to say that the people in Mo i Rana, which you will tune in shortly, have been able to, you know, tackle all the problems that have come their way and started up the Customer Qualification Plant, now also with our first batteries assembled, charged, and discharged, and that's a very good situation to be in when we move forward.
Today, we will also be showing you, our technology or production roadmap, so give you more insights into what you should be looking for as we're progressing in producing more and more batteries, increasing the performance of the Customer Qualification Plant, all of which are important elements for us in our financing, efforts, which Oskar will take you through, towards the end of the session. We continue to invite partners, suppliers, customers, people, investors, others to join us on this journey. We don't have all the answers, but we have some of them, and we're moving fast forward, and we're progressing, and we will tell you about most of these progress points as we go along. While being opportunistic and optimistic is kind of critical for success in this industry, we always will display discipline, and we'll make adjustments when we need to.
We have a strong capital position, but we also have built-in flexibility in our business model to cater for the unexpected. I would also like to underline and thank our investors for your vote of confidence that you've so far placed in us. I know you are impatient, and I know we have work to do, but we are moving forward every day. We have moved from PowerPoint to operations, as mentioned several times now. We will continue to allocate our capital, our competence, and capabilities where returns are the highest. We will do so while we're managing an increasing pool of opportunity to capture future opportunities, unlocking a globally leading battery company. We do not believe that there will be many of them.
It'll be a degree of consolidation in this industry, and we aspire to be one of those leading companies in the not-so-distant future. Let me now take you through the main messages for today, some of which were already in our press release. We have assembled and charged and discharged our first batteries at the Customer Qualification Plant. This is a unique operating unit that gives us the training ground and the opportunity to really move forward now with an increasing number of customers, which Jeremy will take you through a little bit later. Norway's support package for the battery industry is being announced this week, and we will get a glimpse into what is coming from the Minister of Trade and Industry, who will speak to us a little bit later in the day. We are progressing with our farm down process for Giga America.
As you might have realized, we want to sort of go sell down up to 40% of the equity in that facility, and that is progressing. Jeremy will take you through the status of that and how we're sort of faring in this regard. We have signed additional partnerships on technology diversification to basically get more access to the EV market and other market segments and complement the 24M technology, which is mostly suitable today for low C-rate applications or overnight type charge applications or energy storage applications. The Energy Transition Coalition, which we launched when we opened our Customer Qualification Plant, is gaining momentum, and we will be announcing in the not-so-distant future a major global OEM that will take part in that coalition as well. Jeremy will take you through where we are on this one.
We're also continuing strongly on the customer front. We now have, in our initially targeted verticals, more than 600 GWh of cumulative demand leading up to 2030. That is way more than what we will be able to produce, and of course, there are others that are also fighting for those volumes, but we have very strong momentum with some of our core customers, and hopefully, one of our customers will actually come and speak about this later in the day. As I mentioned, we will talk about the milestones and the production plan so that you can monitor and get more educated as we're moving along in our production from the CQP.
Massive progress across the board, as you can see, and you can imagine when I received this picture this weekend, that that was kind of a special moment. We've been talking about assembling, charging, and discharging batteries. We've built the facility, and dedicated people have really sort of spent hours and hours, days and nights, and weekends and whatnot, to get to the position that we've actually assembled, charged, and discharged our first battery. There is an exceptional amount of dedication and focus that lies behind this picture, and this is something that really sort of brings pride to the organization, and I'm very proud of the people who have been able to do this. This is, as we keep saying, just the beginning.
We need to take the starting point that we've proven that we can turn active materials into a battery that can charge and discharge current to something that actually is meaningful from a commercial perspective. That is what we're gonna take you through throughout the rest of the day. This is the type of data that we will be reporting to the markets, how we are trending on producing batteries. What you should be on the lookout for. There's a couple of important things. First and foremost, we are moving from a partially automated full production line to a fully automated production line by ticking off the more challenging parts of that in the next couple of weeks and months. As we're coming into fully automated production, we will start to increase the speed of production.
We will start to, you know, increase the yields in the production. We will start to increase the uptime of it, and we will start reporting on all of these elements. Why are we going to do that? We're gonna do that because this is important from a financing perspective. 'cause we need to demonstrate the capability of operating parameters at certain levels so that the people who are going to buy our products see that we can actually deliver these products in a cost-effective manner. These are the types of data that we will be reporting on. The first battery has been assembled.
It's about producing much more of them and increasing the effectiveness of producing them, so that when we come to the summer of 2025, we have demonstrated and documented and trained our operators in running these facilities as smoothly and effectively as possible, and we'll come back to more of that also a little bit later. Let me quickly sort of take you through the 24M technology and why this is an advantage technology. We've spoken about this many times, and this is my final slide before I'm gonna hand it over to Mo i Rana. We had a fairly lengthy technology selection process in the early days of the company, and we were looking for three things. We were looking for a technology that was commercially introduced, 'cause we didn't want too much technology risk.
Second, we were looking for something that could offer step change in performance and cost when produced at scale. Third, we were looking for something that could drive continuous improvement over time, because this is about being on the left-hand side of the cost curve, and competition is fierce, and therefore, we were looking for that to complement the starting position we had in the Norwegian environment. Here you see a simplistic overview of the benefits of that technology, and you'll see it live from the CQP in a minute or so. Now, what does all of this mean? It means that the footprint of a battery facility using this technology is dramatically shrunk, and this means reduced CapEx per installed unit.
It also means, because we're removing most of the energy-intensive parts of the process, that we're using much less energy in the process, which is one of the key cost drivers of conventional technology. We are also producing larger and thicker electrodes, as you know, through this SemiSolid production platform. That means that we have more energy-carrying material per volumetric unit of product. We are producing much more batteries per operator. These operators have generally a slightly different competence profile than the conventional technology. We think we can produce as much as 3 x as many batteries per operator as conventional technology can when we're taking this to scale. This is what the CQP will allow us to now document and demonstrate as well. Also the final application benefits when you're having larger and thicker electrodes are quite significant.
If you think about it, when you put cylindrical small batteries in the bottom of a car, you need to put 7,000 of them in the current sort of construct. If you have larger, thicker batteries, principally, you will get more energy-carrying material, lighter batteries, better batteries, more energy-carrying material into the final application. These are some of the benefits of that technology. I didn't want to sort of spend too much time on it, but that's kind of just a reminder before I now hand it over to our friends in Mo i Rana.
Welcome to CQP. We are proud to introduce you our Customer Qualification Plant that was built to meet the growing global demand for energy storage solutions.
Yes, behind us, you can see the CQP and Test Center building, which has been equipped with very special equipment for producing, testing, and validating our batteries. Actually, we are going to use this building for three purposes. First of all, we will use it to produce samples of the SemiSolid 24M technology for our clients. We will also use it to develop our products to the next level and improve our quality. Third, we will use it to educate our personnel, so we can spend our personnel in all the gigafactories that we are going to build.
CQP is located in the northern Norway, close to Mo i Rana docks, in an area of approximately 13,000 sq m . Inside, you are going to find an advanced manufacturing facility with high automated equipment, driving the continuous improvement of the process. The 24M product platform is an innovative and streamlined battery manufacturing process. This process is free from solvents and binders that reduce the concerns about the environment and the use of harmful materials. Besides that, we greatly enhance the potential for recycling.
Yes, and this technology significantly reduces the number of production steps. Since the technology is without binder and solvent, we can significantly reduce our energy consumption, our area usage, and our emission footprint.
Our CQP serves as a hub for collaboration and innovation, fostering the partnership of research, customers, and industry experts.
Access to renewable energy is a very important factor for us, and we have signed a long-term agreement with Statkraft. Our ambition is to make a positive impact on the energy storage industry and the global environment.
Directly from CQP, Robinson will show you the detailed process.
Thanks guys, welcome to the interior of the CQP. I will be taking you on a tour of this plant, a factory designed to produce high-quality, world-class batteries. Behind me is the warehouse. This is where we receive incoming materials. What is very important is the next step, where we test those incoming materials. Join me as we now take a look at the quality lab. Hi Okan. Can you tell us a little bit more about this room now?
This is the quality control lab. This is where we can take samples from raw materials and test that they're all within specifications.
Why is it so important for materials to be within specifications?
Materials for battery production needs to be of very high purity. Here we can measure for contaminants in low concentration.
I see quite a bit of cutting-edge lab equipment here. Can you tell us more about this instrument to my right in particular?
This is a glove box. Some of the materials we're handling are sensitive to air. We use an inert atmosphere.
What happens to materials after they've been approved here in the QC lab?
Once we see that everything is in order, we can approve the materials, and production can commence.
It sounds like we should go to the next step in the production process, powder processing. Hi, Bård. Can you tell us a little bit about what's going on in the anode powder room?
The purpose of the powder rooms in general is to prepare material for slurry later. In this room, the anode powder room, we have large bags of graphite that we dump into our conveying system and store in our end hopper. Separate to that, we have our glove box, where we put in bags of conductive carbon, open them, transport it to our end hopper.
That's the anode powder room. What can you tell us about the cathode powder room next door and how it differs?
The cathode powder room is a little bit more complex. We have additional steps of drying, where we dry conductive carbon and LFP. LFP is lithium iron phosphate, and these steps are quite critical because the powder in the cathode room is heavily impacting the properties of the final battery.
We have a large number of processing and quality checkpoints for our powder systems. Can you give us a few examples?
In addition to our incoming material checks, we have in-process verification. Those could be moisture levels, contaminations, or general powder characteristics. When we have verified those levels, we have powder in our end hoppers that can be sent to slurry.
Thanks, Bård. We just came from the powder processing area. What can you tell us about this next step in the process?
Welcome to the slurry room. We have two of these, one for anode and one for cathode. We are now in the anode slurry room, and this is where we make slurry. This is part of the dry room and clean room environment. That's why we're dressed like we are now. Batteries are really sensitive to moisture, so to ensure the quality during its lifetime, we minimize the moisture.
What else can you tell us about this slurry?
You were in powder processing, you said? We take these powders and then mix them with the electrolyte to form a clay-like material that is very unique to 24M's SemiSolid technology.
This clay-like material, this slurry, where does it actually go next in our process?
We take some samples and send them to our quality control lab, and then we feed this material into cartridges, which are then sent to the next process step, which is casting.
We will definitely investigate casting in a moment, but first, I think we need to go see foil cut lamination. Thanks, Lasse.
Thank you.
Hi, Ida. Do you think you could tell us about foil cut and lamination?
Yeah, sure. This machine is then using rolls of plastic film and metal foil as input materials. The first process step we have in this process is that we are cutting slots into our plastic film. After that, we are aligning these two materials and merging them together by the use of a lamination. The next step is to cut out the parts that we are producing. This also allows us to remove the excessive waste material around that part. The excessive foil that we have been removing is going to the backside of the machine, where we are compressing it and where it's later going to the recycling. The product parts are anyways continuing through the process. They're going to a second lamination step, where it's also the final one.
We now consider the parts to be completed. We can then proceed with our quality checks.
Can you tell us a little bit more about these quality checks?
To mention a few, I can say we are checking the peel strength of our lamination to ensure that we have enough strength, as it goes through the next processes. We're also checking the dimensions of parts, as well as looking for surface defects. It could be ripples, wrinkles, scratches, spurs. Yeah, you name it.
After these parts have completed our quality process, where do these products go next?
We are producing several kilometers of current collectors, which will be rewinded up as a roll, and this roll will then go as input material to the next process, which is the casting and unicell assembly.
Thanks so much for that explanation, Ida. It looks like we have quite a bit of activity in this area. Let's see what we're up to. Hi, Moses.
Hi, Robinson.
What can you tell me about the process behind you?
What you're looking at behind us is the casting machine. This is the process where materials you've seen before from previous processes come together. We have rolls of laminate material coming in from the foil cut lamination, as well as filled slurry cartridges coming in from the mixing slurry rooms. What basically happens is that these rolls of material are loaded into the machine, and the slurry cartridges are also loaded into the casting machine automatically. What happens is that after loading, we run a piston through the cartridges to extrude the slurry onto the current collectors. What eventually comes out is what we call the unicells. These are the anode and cathode electrodes.
What happens to our cathode and anode electrodes?
Basically, these electrodes, the anode and cathode, are merged together with a thin separator in between. The most important thing here is that these electrodes are then inspected for quality using a series of sensors and vision systems. After the inspection, the unit cells are then stuck together on carriers, which is then sent to the pouch assembly.
Thank you, Moses. That was an excellent explanation. Hi, Ashim. Do you think you could tell us about pouch assembly?
Yeah, as you said, this is the pouch assembly. In simple word, in this process, we'll be merging our unit cell stacks into pouches in dry condition. Basically, in this process, we have two different lines. One is welding line, and another is assembly line.
It sounds like we should start with the welding line first. Can you tell us a little bit more about that?
Yeah, sure. At first, the unit start from casting will be fed into welding line through this conveyor. We measure the thickness of the cell. After that, there is a welding station where we weld our both anode and the cathode tab using ultrasonic welding. In the vision system, we set the alignment and the position of the tab, which is very important in our case. The cell is transferred and insert in one of the pouches, and then it is transported into the merging station, where it will merge into another pouches with precision.
Okay, thanks for the explanation. Appreciate it. We just got a tour of the welding side of things. Do you think you could talk to us about the assembly side of pouch assembly?
Of course, I can. Assembly side starts with unwinding process, where we are unwinding the pouch material. We are making a forming step, where we are forming the pouch cup. After that, we have got a quality check. By vision system, we are checking all of quality aspects, like, cracks, vision defects. After vision system, we are trimming and singulating each pouch. We are inserting the stack from the welding side into the two pouches. After that, we are making a sealing. After sealing, we are printing a unique number with barcode, which enable us to make a proper traceability of the cell.
After these checks, we now have pouch cells exiting the dry room. Where do these go next?
Inside of the tray, they are going to formation and aging.
Okay. Thanks so much, Witold. Hi Vegard, g ood to see you. Can you shed some light on what happens here in formation and aging?
The first step of this process is the pre-charge step. The cell will be charged up to the small initial charge under applied pressure. During this step, cell will produce some gases due to chemical reactions. After this step, the gas will then be removed.
After pre-charge and degas, what steps do our cells go through?
Cell are then trimmed down to their final dimensions, where they are transported back to the formation towers, where they will finish their formation and get their complete charge. Cell are then transported to the aging facilities, where they are stored for multiple days to stabilize the chemical reactions.
What final checks do we conduct on these cells to ensure cell quality?
The final quality checks include internal resistance measurements, review of the formation and aging data, as well as thickness, weight, and dimension check, and a final visual appearance check. When the cell has passed these tests, they are ready for packing and final transport.
Well, that takes us to the end of our production process. Thanks Vegard. Hi Fredrik. What can you tell us about the CQP control room?
The CQP control room is the brain of the whole CQP. It provides us with data from our production processes, as well as it collects data from our manufacturing execution system.
Beyond just the collection of production data, what other purposes does the CQP control room serve?
It's also connected to our building automation system, collecting data from temperature control and dry room conditions. It also serves as an emergency central if there were to occur any incidents inside of the CQP, providing us with the right tools and the right facilities to handle any kind of incidents inside of the CQP.
Thanks for that overview, Fredrik. I appreciate it. Now, back in the process for some final remarks with Thomas. This is it. This is how we electrify the future.
Yes, so the start of sample cell manufacturing is a major milestone for us. The key step for us to enable technical validation of the 24M manufacturing technology puts us straight in a position to speed up commercial dialogues, secure binding sales agreements, and accelerate construction at the gigafactories.
Can you tell us a little bit more about the purpose of the CQP?
The 24M technology and the meaning with the CQP is to really demonstrate that we are enabled to implement the technology in a large-scale operation.
This team that we've brought together, it's obviously very interdisciplinary, multinational. Can you tell us more about how we've built this team?
The team is recruited worldwide, some with battery competence, some with a lot of operational experience, and together, we have formed a very good team dedicated in the duty. They will run the CQP and also provide training to the next recruitments that we will have. This will really be a key operating plan for us.
Thanks. I might be biased, but I am very excited about our future here. Any final thoughts, Thomas?
We will continuously work on improving the quality, increase the speed, and the automation level of the production process. We have top-notch people, we have cutting-edge facilities, collaborative partnerships, and a strong commitment to sustainability.
We are poised to shape the future of clean energy technology and contribute to a more sustainable world.
Next, we're gonna move live to Mo i Rana. We have Jan Arve Haugan, our Chief Operating Officer, Tove Nielsen Ljungquist, our Head of Operations, Einar Kilde, who is our Head of Project Execution, and Andreas Bentzen, who is our Head of Technology. If this works okay, we're gonna cut to the live stream now. There's the team. Jan Arve, can you hear us? One more time.
Can you try to speak?
There we go.
Hello, everyone.
Okay. Hi Jan Arve. We have you.
Hi.
Can you hear us?
Okay
clear?
I can hear you loud and clear. Very good.
Good. Take it away.
We are now live from the control room in the CQP. I'm also biased, Robinson, I'm also extremely proud of what I saw in the video. Extremely nice. We are as you announced us, Jeff, we are here together with our operational team and the project execution and technology. Today, we are extremely proud that we have delivered on another milestone, and that is to have assembled and charged and discharged our first electrodes in the battery system. Our team is now planning for the final fine-tuning, and of course, the commissioning all the remaining commissioning packages in order to hand over the final components of the production system into operations.
As Tom noted, we have been focusing on the semi-automated production system and of the production unicells, we are now advancing into fully automated production facilities as we go into the next quarter. To put it mildly, obviously, we have had very exciting times, and we are in exciting times here at FREYR. As we have commented several times before, we are not immune to the challenges, first of all, in the global supply chain, but also assembling all the advanced machineries here at Mo i Rana. We are doing this with a strong commitment and an extremely competent organization. I'm proud to say that I'm also, as I said, touched and sort of proud of putting these type of teams in together and operating our first operating plant.
Before I open up for question and comments from the team in New York, I would like to start by asking you, Einar, you are Head of Project Execution. What's the three most important items that you are gonna bring from the CQP and into the construction of the gigafactories ahead of us?
Thank you Jan Arve. Even after working on project execution projects worldwide in 35 years, it has been a lot of learning, building the factory I've just seen on the film. Through concept development, through engineering, procurement, and construction, after the opening in March, we have learned a lot doing commissioning, testing, and production trials. In our projects, safety and quality has been our main KPIs. Let me start with the learning from safety. We have achieved excellent safety KPIs on the project, the most important area has been to build a safety culture. We have built a safety culture together with our contractors and suppliers, mainly based on our experience from oil and gas, and this enable us to provide a safe workplace for the Giga project. Secondly, quality.
Through extensive testing, both with the contractors and here in Mo, we have proven excellent quality. With a close collaboration with the contractors, we have been able to be close and monitor the quality of critical components. That has been of utmost importance and also learning for us. We have also, in this process, understood more what is challenging and where we have to focus, where it's critical to achieve the quality. Thirdly, the competence and our collaboration with our licensor, 24M, our contractors, has been of utmost importance. We managed to develop an organization with individuals with competence and experience required. Through the CQP, we have gone from a group of individuals to a one team with a common competence and values and a management system that makes us stronger as a company and as a team.
We have also understood more about the core technology that we have achieved through our licensor, 24M, and we have also established a strong collaboration with them to implement this technology in the right way. Lastly, the success is also depending hugely with our collaboration with contractors and suppliers. Through the process in the CQP, we have gotten closer. We have also, together, understood more what is the challenges and the criticality, so we can improve and focus even stronger for the Giga Arctic project. Secondly, in all projects, you need to understand your scope of work, you need to understand your interfaces to really prepare for a good commercial and strong execution.
Thanks a lot, Einar. I'm very proud of what we have been able to do here on putting this together. Now, Tove, as Head of Operations, there are a lot of issues that obviously you are also focusing on, but if you could share with the audience, what is the three main elements that you think you can contribute to when you are taking over now and start operating the plant?
Yes, thank you Jan Arve. I think our first priority in operation will always be to create and maintain our safety culture. At the same time, and step by step, we will improving our production processes in terms of high increasing uptime and also reducing the yield. Also, we will focus in increasing the production speed. The operational team in Mo i Rana are all handpicked. We are focused on getting recruited people with a high attitude when it comes to problem-solving, but also heavy ability to take decisions. They are all highly educated, very confident in using data tools and data models, which is also very good attitude to have with you when you are going to ramp up a plant.
Gathering data and utilization this data from the CQP will not only help us to progress the CQP ramp-up, but this will put us in a unique situation for the ramp-up period for the gigafactories to come.
Thanks a lot, Tove. Very strong and dedicated operational excellence in what you're doing here. Andreas, please, obviously, as EVP of Technology, you have learned also a lot of issues in the SemiSolid technology. Could you share with the audience some of the parts of the roadmap that you see ahead of us?
Thank you Jan Arve, for the opportunity now. The CQP here behind us is a unique facility that allows us to take our process and product development to gigawatt-hour scale. We are already today investing significantly in research and development to optimize materials, cell designs, and manufacturing processes. This is going to improve the energy capacity, the power, performance, and even the durability of our products going forward. In our process of product development, we are already today utilizing advanced modeling and data analysis in order to achieve data-driven decision making. The data capturing strategies that are already being built into the CQP is going to feed those models with significant data, improving the speed of our development activities.
We are going to prioritize development of cleaner and more sustainable battery manufacturing processes, including waste reduction, waste recovery and reuse, and recycling. Our technology roadmap builds on collaboration and partnerships with research institutions, academia, and industry leaders. We believe that strategic alliances and open innovation will accelerate growth for the battery industry. In summary, our roadmap for the 24M SemiSolid technology is based on continuous innovation, scalability, sustainability, and strategic partnerships. Our teams are dedicated to push the boundaries of battery technology to improve manufacturing processes, and to ensure a green future for energy storage.
Yes, very impressive. I'm looking forward to new challenges. Thanks a lot. Jeff, we will give the word back to you, but before we do that, can I please be allowed to share the latest drone video that we have taken of the gigafactory up, which is located just east of our current location? Now, just in the light of the midnight sun. Please share with the audience the latest drone video. Jeff, I'm so proud of showing this as well. I think I give the word back to you, and you can now guide us through the questions and comments.
Thanks Jan Arve and thanks, team. Okay the mic is open for anybody who wants to ask the team questions. I'll pass it around. Anybody? There we go, Adam.
First, congratulations on all the progress. That looks great. It's Adam Jonas from Morgan Stanley. I just wanted to understand what kind of information we could continue to expect reported by the team up in Mo i Rana on the progress. I'm thinking things like speed or level of automation, yield, quality, reject rate, just to help manage our expectations. Tom, please chime in here, of what should we be focusing on, and would you commit to kind of consistently reporting as we kind of keep having the milestones plan out? Thanks.
Yeah.
Yes.
Thank you, Adam. Let me just frame this a little bit, and then Jan Arve and Tove can sort of chime in. One key metric to think about here is something we call overall equipment efficiency, which really is a function of two things: it's yield and uptime. Uptime means how much availability do we have of the facility on a 24/7, 365 basis? We can actually have a machinery that, you know, is able to receive materials. That's the uptime part. The yield part is how much of the materials we push through that available machinery is actually converted into real product. That's a journey that most battery companies go on, and you have very high scrap rates in the beginning. As you then are improving your operations, you should trend positively on these things.
That's one part of it. The other part of it is speed of production. 'Cause not only do you need to have the machinery available to take active materials and convert it into viable batteries, you also need to increase the speed at which you're doing that on a continuous basis. This is traditional, you know, the common challenge for everyone. These are the sort of three main elements that we should be reporting on. You should expect that to be gradual. It's not something where we're gonna jump up to a very high level, but it's gonna be a gradual sort of development. Typically, we'd see 12 to 18 months before we actually reach the targeted overall equipment efficiency levels that we're targeting. Maybe, Jan Arve and Tove, you can sort of add a little bit to this question from Adam.
Yeah, I will start then Tom, because I think that the 24M technology obviously also have the feature of giving us results very quickly. Obviously, the feedback loop that we get from the results are extremely important and analyzing this in a way of continuously improving. Tove, I guess that you're looking forward to start this.
No, but I think, Tom Einar, you already said it. I think we are committed to report back both yield and uptime, and also speed, performance. As I reported, in the talk before here today, I think we need to set targets also for our own purposes. With the data we have available, I think that we should be able to have a good estimate of what we can expect quickly, pretty quickly.
Gabe?
Thanks, Jeff. Thanks Tom and congrats, everybody, on the progress so far. It's Gabe Daoud from TD Cowen. Was hoping, Tom, maybe you could just give us a little bit of color on the speed. How many meters per minute are you attempting to get to, I think, in by 1Q24 at CQP? What's the step change in that target from CQP to Giga Arctic and the first lines there?
The 24M technology is a generational technology platform. It means that we are developing the technology over time in different generations. We are implementing what we label Generation 2 in the CQP, and these are the first generations that we will be implementing in the gigafactories. These are technology platforms that should allow us to get to 20 m a minute in sort of the throughput of the active mass through the machinery. The CQP are gonna demonstrate that in bursts at a time. We're not gonna do that immediately. We're gonna gradually sort of get into that.
Our operating parameters assumptions going into the profitability calculations for the gigafactories assume that these two first production lines of Giga America, and also now, as we'll come to later, two first production lines of Giga Arctic, will be based on these production lines, and therefore we need to show that we can document and validate 20 m a minute in the production speed.
Okay, great. Just one quick follow-up. The 12-18 month target, I guess, to achieve scale, is that to achieve, like, an 80% OEE? Is that how we should think about it?
Maybe Tove, you can sort of stick your neck out here on what the overall equipment efficiency targets we're having.
I think there is a tremendous difference in the CQP and the gigafactories. For the gigafactories, we will obviously, have a much higher expectations for the OEE than we will have in a pilot plant, where we, as you have heard today, will utilize the factory to validate the technology and to test out raw materials. Maybe we need to build it up, build then modify some equipment, also to train people. I think it make more sense to think about how much learning can we take out of the pilot plant and the CQP to enhance a high OEE for the gigafactories.
To answer the question, we are targeting, up to 85% overall equipment effectiveness in the gigafactories, gradually over time.
Philip?
Thanks very much for the presentation and congrats guys, on reaching the milestone. It's Philip from Goldman. You know, thinking about scaling up production, moving to giga scale, You know, Tom, you referenced Northvolt sort of as a model, a role model, you know, early in your presentation, and someone who followed Northvolt quite closely. One of the issues they faced was clearly access to finding the right people, right? Just given sort of where the plant is located, and it's still quite a people-intensive business. Can you maybe just share about sort of what has your experience been so far in Mo i Rana? If you think about moving to giga scale production, how you're looking to tackle that?
Let me take a general comment on that, and maybe, Tove, you can sort of comment on this as well. A great question, by the way. So far, knock on wood, we have been able to attract the people we need. As mentioned during the video, these are from all over the world. These are multidisciplinary teams that are passionate people and dedicated people in the sort of mission that FREYR is on, which is clean battery solutions. The one example I tend to sort of bring is that the guy on the initial video, he's a Brazilian. Him and his wife are both battery engineers. They had very good jobs in Brazil, and they decided to move to Mo i Rana, which is kind of a big step, right?
That is one example of people that we're able to attract to it. Maybe, Tove, you can say a little bit about how we're thinking about building the teams for Giga Arctic as an example, and how we aim to sort of close that obvious challenge.
For the pilot plant now in Mo i Rana, we are about 50 people in the CQP, all in all, where 30 of those will go on shift. I think when it comes to the Giga Arctic, of course, it is another number of employees that we need. I don't think that will be easy, but I think that we have now shown that we have really been able to attract good people, and these people will train the next lines of operators. Also, I think we will not, you know, start all the lines in one go. We will start line by line so that we can train the people, and we don't need to have the top-notch battery people in all the lines.
I think we have a good plan. We have also a good connection with the universities and have been able to open the technical schools in Mo i Rana to also have after education of our people.
Thank you Tove. Maybe sort of final comment from me, again, back to sort of the benefits of the 24M technology. We can probably triple the amount of batteries produced per employee, which means, of course, that we need a third as many people as conventional technology, which is a distinguishing feature of the technology. That remains, in a way for us, to be proven, but that was also a core part of why we selected it. It is going to be a competence-intensive journey, and therefore minimizing how much competence you need could be a differentiating factor. Okay?
Okay.
I think we close for this session, and we move on to the program.
Thanks, Jan Arve Haugan. Thanks, team.
Thank you very much.
Bye-bye.
Now you can kick back and relax at least for a couple of minutes. Let's see. Here we are. A couple of weeks ago, FREYR also launched our new brand identity, and you can see that identity here on the screen. It's a new sort of approach to energy. We engineer and produce.
Right
The next era in lithium-ion batteries. Less materials, less energy consumption, and higher energy density batteries at scale. We believe and focus on making these batteries affordable and accessible to all, and working with our partners, of course, to mitigate costs and everything to scale up production, as been mentioned by the team. In short term, we needed to sort of establish a new brand to support us in two things. One, it's important for us to sort of distinguish ourselves from the crowd, to create distinction of the three products that we now also launched, Ægir, Sleipnir, and Ymir, for those of you who tuned in to our Customer Qualification Plant opening. These are our products, product families in the energy storage, EV, and e-mobility spaces.
We're actually starting to get real products defined and discussed with our customers. This also allows us to, of course, rapidly grow internationally, as we are distinguishing ourselves based on the Nordic heritage relative to competition. We have an industrialization partner of choice approach, meaning that we want to partner with leading companies across the entire spectrum. Being that differentiated and having this energy in our logo is something that has actually triggered a lot of interest. Our team will now take you through how that interest is manifesting itself into commercial progress. With that, I'm going to hand it over to our commercial team to take you through our approach on the customer side and the progress in these areas. Thierry?
Good morning everyone. Good afternoon. I will have a few words to describe our commercial approach, sales approach, our status, and the main initiatives that we are working on. First, on our approach in sales, the whole sales organization at FREYR come from the battery industry. We have a deep knowledge of the industry. However, we always learn. We listen a lot to our customers, and what we have been learning in the past few months is the customer going back to us because we are listening to their requirements. We are tailor-made the product that they are interested in, and we try to have this differentiator because other manufacturer do not necessarily have this capacity.
Just a few pictures for from our last event that we had in Munich, the biggest ESS show. We bring with us people coming from supply chain, from technical, because we're selling a technical product, and most of our customers wants to have a deep interest of what we are doing. Also, what we learn is how to make the product fit the customer requirements, which led our sales organization to have another piece of the organization created. I decided to create an application engineering department that will translate into technical term what the market is requiring. We have a focused technical support answering RFQs. We try to shape all our technical offering into meaningful data for our customers, test result, warranty statement, test data, very important. We are watching the market continuously.
We are learning from our customer the real status of the, of the market, what the product is needed, but also our competitors. I would say that with this approach, we are able to capture the most important information to get the right product in our customer hands. We believe that the best market intelligence has to come from our customers. We have built this, and our customer are really pleased that we are able to get product in the hand. Next, I wanted to show briefly our status on the three main markets. We are in ESS, in e-mobility and EV. Our first market is ESS, energy storage. We have seen an increase of demand months after months.
Of course, the IRA has been supporting us a lot, but we see a lot of project as well in Europe that, only a few months ago, didn't really materialize. All those, big projects are required to be placed in the market between 2025 to 2027, and this is a growing number of projects. The pipeline for all our customers is increasingly being very high, sorry, and up to 350 GWh is a pipeline from all our customers. We are delivering product either ourselves or from Mo i Rana, we deliver product through our joint venture with Nidec Energy. This is our primary focus on ESS, and the market is growing. On e-mobility, we call e-mobility whatever moves that is not passenger car, so it's truck, marine industry, commercial vehicle.
We also have here a large demand for application for customers who wants to have locally made product, Europe and in America in particular. Here we have a lot of interest with the 24M technology, but as we are listening as well, we are working for a new technology partner that we might be able to announce soon for really specific application, for example, in eVTOL, electrical, vertical and take-off and landing vehicles. Very high power product are required, and we will work with a different technology to also tackle this market. Again, listening from customer is very important. Also here, the amount of batteries required by all our customers exceed 250 GWh with all the dialogues that we have at the moment.
Lastly, on EV and passenger cars, also a very high demand for localized production in Europe and in America. We are working with a large OEM that soon we'll be able, hopefully, to announce. Also Jeremy might mention a few words. We are progressing very well long term with 24M, also short term with a partnership with an Asian company that I will let Tom introduce in the next few instances. We are progressing very well in all those three segments, totally more than 600 GWh worth of demand from our customers. That's quite significant. Thank you. That was my few words on commercial side.
Thank you. When it comes to the near-term priorities on the customer side, obviously, it's about attracting customers. We're trying to balance this as well, because entering into long-term offtake agreements is important from a project finance perspective, which Oscar will come back to, but you're also then committing a large chunk of the volumes that you're producing at discounted prices. We need to find that balance to ensure that we can capture the merchant nature of the market in a, what we believe still will be a short market for a pretty long period of time, but balancing that against, you know, the requirements for long-term offtake agreements. There is more than enough demand for us to satisfy the project finance requirements of our business.
As we are now moving into operations with the CQP and getting the operational data as we've been discussing, hitting those conditions precedent in some of these agreements will be much easier for us to do and sort of getting into the real nuts and bolts of things. We also announced today that we have entered into a new agreement with Sunwoda company, which is one of the leading, if not the leading, Asian company on producing batteries for electronics. Many of you might have heard of them. They have eight manufacturing centers around in China. They produce all form factors and all chemistries. We're very pleased that we, last week, were able to agree with them on the partnership.
This will complement very well our LFP 24 amp-based focus to sort of complement that into other chemistries and other market verticals, in particular, the EV application. They have very strong capabilities, and I had the pleasure of meeting them in Shenzhen one week ago today. Very sort of capable partner, which we will now discuss how we can bring their technology to the Western Hemisphere. When it comes to our partnership with Nidec, our very good friend, Laurent Dem ortier, who was on the agenda earlier, was supposed to be here, but he is stuck in Minneapolis. I just wanted to mention that this relationship is strengthening quite significantly. We're expanding our relationship with them in Norway.
As you know, we have a joint venture agreement with them, which is called Nidec Energy, which is the module DC block facility that we're building next to Gigarctic, where we're gonna take the battery cells that we produce in Gigarctic and turn them into ESS modules and DC blocks for export. We're expanding that relationship, so we're increasing the offtake commitments with them. We are also inviting them into our U.S. facilities, and they're very interested to replicate what we have done in Norway, also in the U.S. facilities, and they are committed to investing into the Giga America facility as one of our strategic partners. This is what he was supposed to be saying in this section, but unfortunately, he was hindered to be here.
I'm sure that you will hear more from him in the not-so-distant future. With that, let me hand it over to Jeremy to take you through some of the other strategic initiatives.
Thank you, Tom. As we announced at our Chapter 1 event at the end of March at the CQP in Mo i Rana, we have formed the Energy Transition Acceleration Coalition, which is a lot of words to say, a group of people that care about the same stuff. That vision is to accelerate the scale of battery deployment to meet net zero goals. We formed this coalition with four partners that you'll see here on the list: Glencore, Nidec, Siemens, and Caterpillar. We felt like that was a good cross-section of the value chain and would bring different capabilities and skill sets to the party, so to speak. We kicked off the coalition actually two weeks ago. We had our first steering committee meeting, which was well attended. All parties were there.
We had a good discussion about the potential work streams that we wanna go tackle, which I'll talk about here in a second. The second topic that we talked about was the potential membership expansion of the coalition, which we'll talk about here in a second as well. These were the first three areas that we identified as work streams. When we meet in July, we'll be prioritizing these work streams. We'll be identifying resources at each of the companies that will work on each of these opportunities as we move them forward. Mining decarbonization was probably the one I'm guessing will be the top priority initially when you think about some of the names in the coalition, but also battery recycling is important.
How do you decarbonize the logistics in the value chain, which is a big piece of actually the carbon footprint of a battery cell that's manufactured today. We had broad interest in these three as initial work streams, and again, we'll prioritize that in July and get resources and get moving on it. The second thing we talked about was, who else do we need in this coalition? As I mentioned, or as Tom mentioned, I should say, that we have identified a partner, which is a major OEM that has confirmed. We'll announce here in a couple of weeks their participation in the coalition.
They'll join the steering committee then add resources as well as we move forward, we're very excited about their participation in this, not only because of who they are, but also the capability they bring, and the relationships that they have already with existing members of the coalition. The other thing I wanted to talk about briefly was Giga America. The drone video makes me a little jealous. I wish we had a drone video in Georgia, we don't yet. We are at the early stages of the Giga America investment process. We call it Project Patriot.
Project Patriot is the identification of strategic and financial sponsors that would want to participate in our investment process as we farm down the equity, in the very first two-line plant, the accelerated plant, that we announced at our last quarterly update. The plan at this point is to build two Generation two- lines, as Tom mentioned, that we'll be focusing on the Generation 2 initially, that would have start of production in the summer of 2025, followed by an eight-line Generation 3 plant with start of production in summer of 2026. That total capacity would give us 38 GWh , between the total eight-line plant, and we think that is a very interesting value proposition with an NPV of roughly $8 billion. We have kicked off the process.
We have 10 different strategic partners under NDA and in the data room and evaluating the opportunity. We've received five initial indications of positive participation, and we're finalizing what that looks like, also working with the other five members on what their participation might look like. We've also hired Citi to represent us as our advisor in this process. Specifically, with the financial sponsors, I've updated the number now, Tom. We've now reached out to over 30 different financial sponsors, and we are in negotiations or have finalized and signed 10, roughly, NDAs, and they're getting included into the data room.
We're kicking off investor presentations, actually later this afternoon, right down the hall, with the first party, and we'll be doing some additional investor presentations while we're here this week, with additional presentations, obviously, virtually, as we move forward, probably after the 4th of July. Very interested across the board. I feel pretty good about where we're at in the process. I think we'll be kicking off deep due diligence here in the month of July. We're still targeting a closing nearing the end of September. That's a goal at this point, at least an initial closing, which would give us good line of sight to get to the summer of 2025 start of production timing. With that, I'm gonna turn it over to our Group CFO, Oscar Brown.
Thanks Jeremy. What better way to transition to financing than do a review of the IRA, which is such a great catalyst for our industry, so really important for the battery cell manufacturing space. It's really straightforward and really simple, which are core components of the Act. The most important one for FREYR is 45X, which relates to the production tax credits around cells and modules. It's an annual tax credit, which is pretty powerful, and it's pretty flexible, right? We can get raw materials from literally anywhere in the world. As long as we build cells and modules in the United States, then we can sell the end product anywhere in the world and claim the credit. It's quite powerful, $35 per kW on cells, $10 on modules.
When you combine the two, and you look at what Jeremy just said, once we get Giga America up to its targeted 38 GWh capacity nameplate, running at the operating efficiency and all the things we think it's gonna run at, get it all ramped up and everything. Once it's at that level, this is about $1.4 billion of annual cash flow added to the model. It is significant. We're quite happy with that. The other nice things about the Act is we can claim that every year, or we can go for five years direct to the IRS and ask them to write us a check.
It's salable and transferable, so in the five years that we're not going straight to the IRS, we can go to the market to the extent we don't need the tax credits ourselves. It's a really, really powerful tool to advance the Giga America project. In addition, just a reminder, the state of Georgia and the county of Coweta, where we got our 400 acre site, which, by the way, we can build multiple gigafactories on, given the size of that plot, has offered us, and we've received now $400 million, over $400 million of commitments for primarily tax abatements, but also some grants. We've already received $20 million of grants from the state. Another $7 million are on the way as well.
Really, it's primarily a tax abatement, process with that $400 million, which kind of comes in over time as we build the facility and as we hire people to man the plant. On the broader picture on financing, again, I think we're a pretty unique investment proposition. We are really the only pure play U.S.-listed battery cell manufacturer right now, and certainly going to gigascale. I think that over time, this has sort of been recognized by the market and by our shareholders. We've raised now $1 billion in common equity over the last two years. This has taken us from a PowerPoint company to really an operating company. As Tom said, we really are a battery company now. We have operating facilities, and we're moving forward with those.
It's a big step to where we've been today, but there's more to do. On Giga Arctic, of course, we are active in the government grant programs, both in the EU and in Norway, but also we've had an ongoing project, traditional project financing process with banks, our export credit agencies, the Nordic Investment Bank and the European Investment Bank, and really moving that process forward. As I mentioned before, we have a number of consultants involved, a lot of due diligence. We've been negotiating a term sheet with our mandated lead arranger banks. You know, key items there are a lot of what we've talked about today in terms of conditions present that are required. Of course, we need supply chain set up. We need our contracts in place for plant line equipment, for building an infrastructure.
You've seen the progress so far on Giga Arctic, also bankable offtake agreements and the like. There's quite a lot of process going in there. We've moved the financing process, kind of like we've moved Giga Arctic, at a measured pace, awaiting full color on the Norwegian government response to the IRA. Why is that important? That'll impact the global competitiveness of the asset relative to the U.S. and other places in the world, but also how we build the capital stack, and also how we execute the rest of the construction process. There are quite a lot of things wrapped into that, but that's coming very soon, so we'll have some clarity for that to share with the market there.
On Giga America, Jeremy's already talked about the first phase, the two-line, project-level equity effort that's underway today. We've also, for the second phase, the eight- lines, which is a much bigger part of the project, started the debt process for that second phase. Even though that phase doesn't come online till mid-2026, which is our target, there's a lot to do in these processes, as we've learned with Giga Arctic, take a long time. They're very complex. In the U.S., we've also got the opportunity with the United States Department of Energy, their loan program. We've started the pre-application process and had many discussions with the DOE in preparing that document to start the Title XVII process. Title XVII is relative to us for energy storage systems.
The ATVM is a different program, same shop, but different program for EVs. In any case, we've started that, and we've also been in discussion with our relationship banks about project financing for Giga America, that second phase as well. We're looking at that in parallel. Really, I think the answer is, while the DOE in theory could provide, you know, all the debt capacity of the project, it'll likely be a much more complicated capital stack involving both the government, banks, other capital providers, tax-exempt bonds, and so on. But we'll come, you know, back to you as that matures, but we really wanted to go in parallel with both the government and the private market to get that process started, which is really important. Well, all of it is really underpinned in the US with the IRA.
The IRA tax credits are bankable. We're hearing from both the DOE and the banks, and they are saleable as well, so those come over time. Right now, there's not yet a forward market developed on it, but we'll at least be able to count that cash flow as part of the models that the banks and the DOE will wanna see regarding debt capacity and the financability of the assets. We have multiple sources of financings available to us: banks, government, strategic partners, private capital, and so on.
What I wanna do with this is really try to wrap in everything we talked about today and the progress that we've made, the industrialization of the business, which we're mostly box checked on, the de-risking of our technology and diversification of our technology platform, and the commercialization of our products and our partnerships. On the industrialization side, we've made great progress, and in fact, we're in very good shape. On the raw materials side, we have what we need to operate the CQP, as well as the initial ramp-up of Giga Arctic, and we're replicating now the same strategy for the U.S. asset. We have now great frameworks and experience with the CQP and Giga Arctic for both our suppliers on building an infrastructure, as well as our plant line equipment.
We've also got now sort of the real-time and actual sort of processes and procedures for global procurement, as well as for project execution excellence and operational excellence, that you heard from Minor and Tova. As well as with the CQP now, the training and operations and safety sort of protocol that we're gonna need to spread around the world with our gigafactories. On the technology side, of course, we have 24M. The CQP is really a key de-risking asset to the giga scale effectiveness of that technology, that you've seen here today. It would also, t he CQP will also help with the SemiSolid on the R&D side.
We can continue to improve the actual production process itself, as well as the products that the plant can produce and the technology can produce. We talked a little bit about Sunwoda and some of the diversification efforts that we have for conventional and other technologies to address new markets like EV. On the commercial side, of course, we've made huge progress in both addressing different markets for ESS, not just cells, but also turnkey solutions with our partnerships with Nidec and others. The Energy Transition Acceleration Coalition, of course, has been critically important in bringing like-minded companies, big industrial companies, together who view, like we do, that the battery is the center of the energy transition and the electrification of the world, that's key.
All this is gonna lead to bankable offtake agreements that we can finance, getting testable batteries into the hands of our customers is key to really accelerating that process on those bankable contracts. When we bring together the industrial, the commercial, and the technology, that's what we need to really accelerate the financing opportunities. We look forward to really continuing to update the market as we make progress, particularly on the debt side of the process and, of course, Jeremy's efforts around the Giga America equity financing. With that, I'll turn it over to Tom.
Thank you Oscar, Before we try to close off this session, we have a special address from the Minister of Trade and Industry from Norway, who is talking about Norway's response to the Inflation Reduction Act, or what Norway does to accelerate the battery industry in the country.
[ Minister of Trade and Industry from Norway in video recording] Dear friends at FREYR, congratulations on producing your first-ever battery cells. You are paving the way for a new battery industry in Norway, in Europe, and in the U.S. Norway is proud of what you guys are achieving. The Norwegian government wholeheartedly supports battery actors, such as you at FREYR, in creating a new, sustainable, and profitable value chain for batteries. It's been one year since the Norwegian government launched our Green Industrial Initiative and Norway's first battery strategy. That was several months before the U.S. Inflation Reduction Act. We identified a need for 60 billion NOK in government risk mitigation to speed up new green industries, such as battery production.
Today, we have allocated a third of that, including to realize FREYR's new battery plant in northern Norway. Already we are seeing an increased desire to invest in green, profitable projects in Norway. We are getting ready to upgrade the Green Industrial Initiative in response to, among others, the Inflation Reduction Act. We will upgrade it in our own Norwegian way, building on our strength and experiences. Watch this space, because more news are coming very soon. We all know that batteries will continue to be a central part of building new green industries in Norway. That's why Norway's battery strategy is all about speed, size, and risk management. We are helping companies to go fast and to go big. We do listen to the industry.
Together, we continuously work to identify challenges and possibilities for realizing a Norwegian value chain for batteries. We also work with other countries, like our friends in the U.S., who share our ambitions for green growth. We think that international cooperation is essential for the green transition. Dear friends, we will not sit still. Norway has a rich industrial history built on public-private partnerships, 100% renewable and cheap energy, cutting-edge technology, world-class skills, and a highly productive workforce. The Norwegian government will continue to support the battery industry and other green industries. We will help you at FREYR to build better batteries with more energy efficiency at a lower cost. Friends, congratulations again on what you have achieved so far, and good luck with your next exciting steps.
Thank you, Minister, for that vote of confidence and support for what we're doing. We're now sort of drawing to a close. Just wanna move to repeat the achievements and what we have announced today. Making strong progress on the operational front, making strong progress on the commercial front, making strong progress on the financing front. Things are coming together. Still a lot of work ahead of us, and the most challenging times always lie ahead, as we say. I have to say that we have turned several corners in our journey since we went public on the New York Stock Exchange less than two years ago.
We're having the honor of having the closing bell today, which is going to be exciting to celebrate our milestone of the first batteries assembled and charged and discharged at the CQP. We might also be in position to have our friend from Nidec join us live. Is that correct? After the Q&A. Let's open up for Q&A now that we've been through the entirety of the presentation. Any additional questions or comments from the crowd?
Hey, Tom. How are you?
I'm good.
I was, I was hoping for a little more, the decision with Sunwoda. As I think about that in terms of, is it a licensing similar to 24M? Is it more of a JV? Also you mentions about, there are different chemistries. Does that mean, you know, in addition to NMC, we're gonna be looking after, you know, whether that's LFP or something else? Really, you know, the, the beauty behind 24M, it was, you know, more geared towards the energy storage. You mentioned the multiple applications around Sunwoda. Is that more to move accelerate into EV? Just kind of at a high level, you know, how you're thinking about that decision and, and kind of, you know, how you see that evolving.
Thank you, Greg s o I think we are still sort of in investigative mode, right. We have agreed to look at how to work together in the Western Hemisphere, leveraging their technology strengths. For us, it will be important to complement our ESS LFP-centric focus with sort of other higher energy density chemistries and other sort of form factors than the ones that we are focusing on with the 24M technology. This should give us an opportunity to accelerate deployment, not only into the EV space, but also potentially other applications where they, as a partner, bring strengths. They already are qualified with a number of global OEMs, so they come with a very strong sort of track record.
As I mentioned, they derive from the electronics batteries industry, similar to what CATL, which spun out in a way, of ATL. Sunwoda has kind of that same high quality focus in electronics batteries, and one of the largest, if not the largest, provider of these batteries today. I think the jury is still a little bit out as to what works and how sort of we can find business models that are accretive to both parties. They could form the types that you mentioned, but there could also be other ways in which we could collaborate. It is— I mean, as I mentioned in my initial co-commentary, the 4x-7x scale up in the next sort of short decade is a 30x-50x challenge, right?
It just does require a different mindset when it comes to partnerships, and different approaches. No one single company can sort of be handling all of this on its own, so I think we need to sort of have flexibility in terms of the partnership in this regard. But, yeah, these are some reflections around that. Jury is still a little bit out on how that's going to work, but stay tuned. We will provide deep updates in a fairly rapid manner around this opportunity.
You're welcome.
Hi, Megan Reed with Bank of America. I was just wondering if you can talk a little bit about the cell parameters that you're producing today. Congratulations again on achieving that so far. I'm just curious how that compares to the 24M specs that you had outlined previously on things like amp hours and C-rates, watt hours per kilogram, things to that effect, or anything that's maybe more relevant.
Yeah, t hank you for that question. I think the when you sort of go down the path of producing first battery, the first sort of target is, of course, to actually produce one, and then, you know, charge it and discharge it. I don't think it's any meaningful data that we can come with for these first batteries. It was more demonstrating that we produce active slurry in the CQP. We turn that active slurry into a battery of the form factor that you've seen. We charge it, and we discharge it, and all of that's done safely. We actually did that with a higher fraction of the cells we produced than what we actually thought we would.
I don't want to sort of over, you know, jump up and down of joy for that because it's very early days, okay? I think the milestone is that we have been able to do it, and now we will start to do more and more of them. As we do more and more of them, all of these technical parameters will, of course, be measured and monitored, and we even reported on, as we spoke about earlier. I think that's kind of the answer here.
Hi, It's Jen from Siemens and congratulations, you've already achieved a lot. One question, when are you expecting to send the first cells to the customers for verification from CQP?
Yeah, a s we mentioned on this, let's call it production roadmap slide, we will most likely be sending initial sample cells in still a not fully automated structure, to customers in the next month-ish, maybe a little bit longer. Then, as we move into the second half of the year, we will start to send fully automated produced cells at spec to an increasing number of customers throughout the second quarter. Of course, we have a week-by-week and month-by-month kind of timeline, so a little bit nerve-wracking for us to sort of be that explicit because, of course, there is a number of unknowns here that we don't really control.
That's kind of how we're thinking about sending it to customers, and that aligns up well with the project finance processes we have for Giga Arctic and Giga America as well, and also the project-level equity farm -down for Giga America. All in all, I think we are now starting to get into that mode where we're actually producing stuff and sending it to customers, and that's a major milestone for us. That's how you should think about that. As we move into, you know, first quarter of 2024, we will producing a lot more batteries than what our current customer pipeline requires. Of course, we will start to optimize, you know, material specs and increase energy densities and focus on yield uptime and these things as we move forward.
Hello, this is Naomi Zimmerman from VanEck. Thank you for a great presentation. Congrats again. I was wondering, you know, to the extent to which is possible, if you could share more about what is expected this week, with the Norwegian upgrade to the IRA, the Green Industrial Initiative, and how we can kind of think about how it might impact the decision-making process and timing on the Giga Arctic battery, construction?
We have been told that the actual announcement will happen this week, and there will be details in that announcement around what risk mitigating elements will come with the Norwegian package. As the minister stated, NOK 20 billion out of the NOK 60 billion Green Industrial Initiative package have already been allocated, part of which is to FREYR. We have, of course, been in deep dialogue with the Norwegian government and provided them with our requirements or wish list, so to speak. What the Norwegian government have been very clear on is that they will to a large extent, try to replicate what the European Union is doing in this regard. As you know, both Germany, France, and Spain have come out with support packages for the industry.
Exactly how that manifests itself in terms of real dollars is still a little bit early for us to sort of speculate too high on. Generally, in Europe, you're looking at 20%-40%-ish, you know, support packages in different structures. That could be bridge loan, loans, different structures. It could be guarantees for project finance structures, et c., or other sort of mechanisms. There could also be equity participation in assets, which is, you know, a tradition in Norway. I think we are looking forward to this with excitement. It was encouraging to hear the minister giving his remarks, and we'll see when it comes. When it then, of course, depending on the nature of that dictates, to a large extent, the pace at which we re-accelerate, potentially, Giga Arctic.
As we've been saying, we have moved forward here at a measured pace in anticipation of clarification from the Norwegian Government. We are flexible in terms of dialing up and down activity, so we're ready to move to the next step.
Any other questions? Okay, hearing none. I think we're going to try to turn it over. Is that correct, stream with Laurent?
Yes, I think so.
Okay.
We might need to move on.
Yeah. Hopefully, it says the same as I did then.
Yes.
We're currently trying to reach him.
Okay. We didn't guarantee this one would work.
Yeah. There were some issues coming into New York yesterday and today, apparently.
There were.
I think, we weren't successful with that n ot everything works, but anyway.
We're still trying.
We're still trying?
Yeah.
Let me sort of try to draw a conclusion here. First of all, thank you for coming. Lunch will be served, after this one, couple of seconds.
Around the corner, yeah.
Okay. It's an important customer, right? It's our first legally binding offtake contract. It's a 38 GWh facility. Here we are. Laurent?
Yeah.
Welcome.
Well Tom. Good afternoon, New York. I think, first of all, I was planning to be with you today, unfortunately, I'm currently blocked on the tarmac of the Minneapolis airport , with no possibility to fly over New York since last night. Just apologize for that. I think I'm I understand I'm the last obstacle before the lunch of everybody, just I think the reason why I wanted to be there is to basically to testify or to witness why we, Nidec, have decided to partner with FREYR. Nidec, we are a leader in the electrical power infrastructure.
That's why you have this picture on my back, which is a large generator for data center. We have been partnering with FREYR for the production of electrical power module. As we know, we have announced our joint venture, Nidec Energy, related to the Giga Arctic project a few months ago. Why we partner with FREYR was very clear. I think, we started discussion with the FREYR team more than two years ago. Basically, there are three things that we were really that differentiate FREYR from any other battery or cell manufacturer. First, their technology.
Technology, yes, it's innovative, but it's pretty natural technology, and it's a very competitive technology on the, on the, on the cell structure. It's really fitted, the what we are looking for, so which mean, cells for large energy storage package. The second reason why we also chose FREYR is that we were very impressed by the industrial plan that FREYR put both with Giga Arctic and Giga America. Last but not least, is the team. I think the team is very enthusiast. I think is fighting hard in all direction. I think we knew about the reputation of Norwegian, but I think it's not, it's well-deserved, I think I would say.
I think this has been a good element for us today. Today, Nidec and FREYR, we have started dialogue on increasing the cell supply. As you know, we already have an off-take of agreement, and we want to extend our partnership in the U.S., first to support our Nidec business in the U.S., which is pretty large and as important as our European or Asian business. We are evaluating options to invest in Giga America, t hat's where we are today, t hat's where we are. The, we plan to do, I think we would be more than happy to explain further why we believe, I think we are really here in an interesting initiative of getting a lot of business opportunity. Thank you.
Thank you very much Laurent t hat, at least in my mind, resonates well with what I said. Thank you for your support. Then we're gonna draw to a close here inviting the people present here to a lunch. I'm really excited about seeing you all. I'm really excited about, you know, telling the world and the streaming audience about the progress that FREYR has made to date. We will be ringing the closing bell on the New York Stock Exchange later today. Tune in for that. That's a big moment for us less than two years after we went public on the New York Stock Exchange. Thank you very much for your attention.
Lunch will be served, and we will be around to answer any additional questions or comments you might have. Thank you.