Cell maker Freyr Battery and Japanese electric motor firm Nidec have finalised a five-year lithium-ion offtake deal and agreed to form a downstream joint venture.
Freyr Battery and Nidec Corporation have announced the completion of an expanded 38GWh battery cell sales agreement from 2025–2030.
Under the terms of the binding sales agreement, Freyr will supply next-generation battery cells to Nidec from its gigafactory in Mo i Rana, Norway, which is under construction.
Nidec has the option to increase the cumulative offtake volumes to 50GWh over the life of the contract, which would represent more than 50% of projected production from Freyr’s gigafactory— Freyr plans to develop up to 43GWh of battery cell production capacity by 2025 and 83GWh by 2028.
Downstream battery joint venture
The downstream joint venture in which Nidec will hold a super-majority is to develop, manufacture and sell battery modules and battery pack solutions for industrial and utility grade battery energy storage systems applications.
The module production is expected to be integrated into Freyr’s Giga Arctic development with volumes of integrated ESS solutions aligning with the targeted ramp-up of cell production in 1H 2024.
Global battery centres
The past few weeks have seen a number of announcements from Freyr, including establishing a lithium-ion cell technology resources campus and business unit in Japan.
The new business unit is the Norwegian company’s first physical location in Asia and will focus on scaling up its testing and development of the 24M Technologies’ (24M) battery platform.
The company is also opening its first US-based technology centre in Boston in accordance with the company’s strategy to accelerate the development of “Giga America”, the company’s first US gigafactory through its joint venture partnership with venture capitalists Koch Strategic Platforms.
While the US facility’s process will initially be based on 24M’s SemiSolid™ platform, the Japanese centre will focus on scaling up the testing and development of 24M’s battery platform.
Tom Einar Jensen, Freyr’s CEO, said: “The US is a critical strategic market for us. With the recent passage of the Inflation Reduction Act, the US is on a path to accelerate the buildout of clean, localised battery supply chains, which dovetails with our long-term strategy.
“As we proceed with site selection for Giga America, establishing our first US location in close proximity to our partners at 24M will enhance technology development, collaboration, personnel development, and strategic coordination.”
To date, the Norwegian firm’s US progress includes conditional offtake agreements with Honeywell and Powin to advance the gigafactory site selection process and appointment of key personnel including a Group CFO and vice president of investor relations.
Strategic partnership with Hana Technology
A strategic alliance frame agreement has been awarded to South Korea-based Hana Technology to jointly develop equipment and automation solutions for Freyr’s Customer Qualification Plant (CGQ) in Norway, as well as its planned gigafactories.
The strategic alliance frame agreement will enable the firms to customise and co-develop solutions for the CQP, including joint development projects such as quality control equipment, ageing time reductions, and artificial intelligence updates to systems to reduce waste.
As part of the strategic alliance frame agreement, Hana Technology will specifically support areas including pouch assembly, formation and ageing, inspection, grading, packaging, as well as scrap-discharge equipment.
Hana Technology will also collaborate with Freyr to review, develop, and improve its technical documentation.
Inflation Reduction Act
The Inflation Reduction Act lowers energy costs and is the most aggressive action on tackling the climate crisis in American history (reducing carbon emissions by roughly 40% by 2030), according to US president Biden’s Whitehouse press release.