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Freyr, based in Norway, was one of the first companies to jump into the US market with big battery plans due to the Inflation Reduction Act passed by Democrats in 2022. I interviewed Freyr’s CEO, Tom Jensen, soon afterward about the plans and about the Inflation Reduction Act. I’ll embed the podcast down at the bottom if you want to go back and listen to it. Unfortunately, it looks like those plans are now dead.
Freyr has announced that it is pulling the plug on the giant battery factory it had planned to build in Georgia, a $2.6 billion factory named “Giga America” (or, I guess, prematurely named Giga America). Is it a coincidence that this plant is being canceled right after Trump took office and said he was going to pull the plug on all of the renewable energy and electric vehicle policies Biden had a hand in? Maybe, maybe not. There are other issues at play.
“Climbing interest rates, falling battery prices, and a change in leadership at the company all contributed to the decision, according to Jason Pearce, Freyr’s senior vice president of business development,” The Newnan Times-Herald writes. Of course, as we all know, the world was hit by strong inflation as a result of factors related to the COVID-19 pandemic and the Russian invasion of Ukraine. Higher interest rates were used to get inflation under control. But higher interest rates also come with their own problems, like Freyr having a more difficult time getting a battery factory off the ground and to profitability.
Falling battery prices was probably one of the biggest factors, though. Battery prices have dropped significantly in the past few years, which is great for consumers but makes profitability an extra difficult challenge for battery companies, especially ones like Freyr trying to get a battery factory off the ground and profitable in the United States. (Note: Freyr was planning to produce batteries for stationary storage battery projects, not EV batteries, at this facility.)
Naturally, though, if you look at those challenges thinking that you might be able to skate through and build the factory and then throw the risk and chaos of Trump’s attacks on cleantech into account, well, who would feel comfortable going through with this $2.6 billion project? The risks would be high.
Notably, the company letter making the announcement came on January 21, basically right after Trump took office.
Freyr is going to return all grants and incentives linked to the project that the company received from Georgia.
While the big “Giga America” battery project is off the table, Freyr is now moving forward with a solar panel production facility in Texas. The facility is nearly complete and Freyr has just acquired it. The solar panel factory will provide “a fast path to cash” for the company, something that the company for some reason prefers over burning cash for years on a battery factory that might never break a profit. Freyr reported a net loss of $27.5 million in the 3rd quarter of 2024, and a net loss of $83 million through the first three quarters all together. Its cash reserves (with no debt) were down to $184.1 million on September 30, 2024, from $275.7 million on September 30, 2023.
Well, good luck to Freyr, and Georgia.
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