Strong points :
- Based on projected lithium prices, the contractual volumes correspond to projected total revenues in excess of $3 billion for FREYR.
- The two companies have also signed an agreement to form a joint venture for energy storage solutions.
Norwegian next-generation battery developer FREYR and Japanese manufacturer of energy storage systems (ESS) and high-efficiency electric motors, Nidec Corporation, announced the completion of an expanded battery cell sales agreement from 38 GWh for the period 2025 – 2030. The companies have also agreed to form a joint venture, in which Nidec will hold a super majority to provide industrial-scale integrated EHS solutions to customers worldwide.
Tom Einar Jensen, CEO of FREYR, said: “Today’s historic sales agreement, including optional volumes, represents approximately 50% of our targeted production of Giga Arctic by 2030. Combined with the confidence of Nidec en FREYR as a joint venture partner for EHS solutions, this represents a fundamentally important step to support the conclusion of our ongoing project financing efforts on competitive terms.
Under this agreement, FREYR will supply a cumulative 38 GWh of clean and next-generation battery cells to Nidec between 2025 and 2030 from its Giga Arctic facility in Norway. Based on projected lithium prices, subject to transfer mechanisms, the contractual volumes are equivalent to total projected revenues in excess of $3 billion for FREYR.
Nidec could increase the cumulative offtake volumes to 50 GWh over the term of the contract, which would represent up to 50% of the planned production of FREYR’s Giga Arctic facility.
The companies signed another agreement to form a downstream joint venture in which Nidec will develop, manufacture and sell low-CO2 battery modules and battery pack solutions for energy storage system applications of industrial and utility grade battery.
FREYR’s official statement indicates that module production is expected to be integrated into Giga Arctic development with volumes of integrated ESS solutions aligned with the targeted ramp-up of cell production in the first half of 2024.
“The JV will support the development of our growing SSE business. The combination of FREYR cellular battery technology and Nidec technology will bring efficient and cost-effective solutions to the market,” said Laurent Demortier, President of Nidec’s Energy and Infrastructure Division.
Jensen added, “Our budding partnership with Nidec underscores FREYR’s accelerating commercial momentum in the EHS space, and it is in line with our strategic intent to expand both upstream and downstream across the value of batteries beyond cell production.
FREYR Battery had recently announced the potential development of industrial-scale battery cell production in Vaasa, Finland and the United States. The company aims to install 50 GWh of battery cell capacity by 2025 and 100 GWh of annual capacity by 2028 and 200 GWh of annual capacity by 2030.
Nidec Corporation claims to be the world’s largest small manufacturer of precision motors in the automotive, industrial and appliance sectors.