FREYR is developing regional supply chains

Oct 5, 2023

Deep port

FREYR Battery has assembled and charged its first LFP (Lithium-Iron-Phosphate) semi-automated next-generation battery cell at the Customer Qualification Plant (CQP) in Mo i Rana, Norway.

FREYR’s strategy is to develop a network of global suppliers while the company establishes regional supply chains. The company aspires to minimize logistics chains to maximize cost efficiency and sustainability without compromising the flexibility of a global platform.

FREYR aspires to localize its raw materials supply chains in both the U.S. and Europe over time. Nevertheless, we expect to source cross-continental supply from regions including Asia while new options across the U.S. and European networks emerge,”

Tilo Hauke, EVP Global Supply Chain Management in FREYR.

Access to lithium
With the projected surge in battery production globally, lithium price volatility and security of supply are important considerations for customers, producers, and vendors across the value chain; and while price volatility is likely to persist, Hauke is not concerned broadly about a lack of available battery materials supply moving forward.

“Transitory supply-demand imbalances are inevitable for an immature industry undergoing a rapid secular growth phase. That dynamic is reflected in the pricing volatility we have witnessed across the raw materials spectrum,” added Hauke. “Lithium prices have more than halved since the beginning of 2023, but with the growth across the industry in recent years, cathode raw materials prices are still generally trending significantly higher since FREYR’s inception. Conversely, improvements in processing efficiency have driven costs for selected anode materials lower.”

“Ultimately, the upstream battery value chain is an extraction business, which means that supply will continue to respond to favorable pricing signals and the secular demand growth from cell producers over time. Moreover, as emerging chemistries are adopted and new electrode technologies are validated, the availability of critical raw materials should not be a long-term problem,” asserted Hauke.

Cobalt-free batteries
FREYR selected 24M Technologies in November 2020 as its technology partner for LFP manufacturing on 24M’s SemiSolidTM platform. Lithium and graphite are the most critical raw materials to enable LFP production at scale, while LFP cells contain neither nickel nor cobalt.

“From the start we expect to take deliveries of processed material to the U.S. from Asia and Europe as we are working on our U.S. value chains. It is also likely that we will export U.S. raw materials for our European production,” added Hauke.

Today, the global battery raw materials supply chain is heavily reliant on Asia. That dynamic will likely change over time as producers seek to decarbonize and localize their sourcing, streamline logistics, and capitalize on regulations such as the Inflation Reduction Act in the U.S.

“For an emerging cell producer such as FREYR, risk mitigation is fundamental to our sourcing strategy and our raw materials contracting framework. Accordingly, we have minimized our exposure to price volatility of key inputs such as lithium by embedding pass-through provisions to customers in our offtake agreements,”

— Tilo Hauke, EVP Global Supply Chain Management in FREYR Battery

“As we continue to localize and decarbonize our supply chains, we believe that this commitment to minimizing risk will safeguard the capital we require to develop our projects, grow our organization, and pursue the highest return opportunities.”