Freyr Battery: "The Termination Process is Already In Progress"

Freyr møte skjermdump

Administrerende direktør i Freyr Battery, Birger Steen (t.v) svarte på spørsmål fra publikum i et åpent møte om Freyrs minimering av anlegget Giga Arctic i Mo i Rana fredag 10. november. Leder for samfunnsutvikling og leverandørkontakt i Freyr, Marius Jøsevold til høyre. Møtet ble strømmet av Rana Blad. (Skjermdump)

Freyr battery factory has already begun terminating employees due to the downscaling of the battery factory Giga Arctic in Mo i Rana, Northern Norway. "No locations will be unaffected," says CEO Birger Steen. The company also stopped projects in Finland and Sweden.

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On Thursday, it was revealed that the battery company Freyr will minimize spending on Giga Arctic in Mo i Rana in 2024. On Friday morning, the company held a briefing in which the CEO informed about the process and answered questions from those present.

The meeting was streamed by Rana Blad.

He repeated that there will be no further development of the battery factory in Mo i Rana in 2024 as originally planned. Instead, the company is betting its all on the battery factory Giga America in Georgia, USA. The reason is the American support package for green industry, IRA, which subsidizes national – and thus also Freyr's – battery production by 35 percent.

Giga Arctic was initially intended to be Freyr's mothership, which Giga America was to be modeled after. First with two production lines, then eight more.

Steen says that European support schemes for battery production cannot compete with the US's support scheme.

Freyr has applied for funds from the Ministry of Trade, Industry and Fisheries of around NOK 9.5 billion for Giga Arctic in Mo i Rana. Steen says that there has been no formal response from the ministry yet.

Cutting costs and terminations

On Thursday, the Freyr employees were notified that there would be an "extensive termination process," as part of cutting costs.

"The employees were notified yesterday," says Steen and promises "proper severance pay" for everyone who loses their job.

This is a market where there is a lot of competition for talent.

Birger Steen, Freyr Battery

Freyr has around 60 employees in Mo i Rana. The company has around 400 employees in Norway in total, including contracted consultants, who are now in danger of losing their jobs.

Steen expressed concern about losing the employees that Freyr wants to keep to develop technology at the Giga Arctic pilot factory.

"This is a market where there is a lot of competition for talent, and we will try to keep those we want to continue," says the director.

He says that no team or location will be unaffected by the layoffs.

"But we will continue to invest in Mo i Rana, which is the heart of our technology development."

Giga Arctic, Mo i Rana

This is how far Freyr Battery had come with the building of the battery factory Giga Arctic in Mo i Rana in January 2023. (Photo: Freyr Battery)

Will be ready for start-up

Steen says that Freyr has been portrayed as a company that only fills its pockets with government money and that it should be possible to work around the US IRA via Europe's Green Deal and Norway's green industrial lift.

"The reality is that it costs 100 dollars per kilowatt hour (kWh) to produce a battery cell. In China, it costs around 70 dollars. Via the IRA, the USA now subsidizes the production of battery cells with 35 dollars per kWh in a start-up phase. So you can produce batteries in the USA for 65 dollars or for 100 dollars in Europe," explains the CEO.

The battery company's pilot factory in Mo i Rana was ready in March 2023, and Giga Arctic was scheduled to be ready in 2024 with eight production lines. Now, the factory is instead taking a break until further notice. Steen says that they want to keep Giga Arctic ready to start up quickly.

"We want to finish building the factory. If we get funding, we will start up again."

Praises the local community

Steen praises the reception Freyr has gotten from the local community.

"The reception is of a quality I have not experienced before. We have received enormous support, which we still hope to have."

He warns against becoming dependent on China for batteries.

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"If we do not get our own battery production in Europe during the 2030s, we will be 90 percent dependent on China for battery cells. And we believe that battery cells will be the most important energy carrier in the society of the future," says Steen.

"Being dependent on a geopolitical competitor is not the best."

Shelves Finland

Freyr's projects in Sweden and Finland are also put on hold. Freyr originally planned to build a cathode factory in Wasa, Finland.

"We are not going to build a battery factory in Finland under these framework conditions," says Steen.

Freyr writes in a press release that they have received NOK 183 million in support from Innovation Norway and Enova. In total, Freyr has invested NOK 4 billion in Mo i Rana since the plans were launched in 2019. In addition, the company has been promised a loan guarantee and a possible loan from Eksfin of up to NOK 4 billion. These funds have not yet been released, the company states.

On Thursday, the Chair of the County Council in Nordland, Svein Øien Eggesvik (Center), stated that the county council will assist the Rana community with challenges in connection with the downscaling at Freyr.

Freyr is now moving its headquarters from Luxembourg to the USA. The goal now is for Giga America to produce its first battery cells in 2025.

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