FREYR Battery: Pessimism Could Be Entirely Priced In

Company Overview - FREYR Battery, Inc. is a US-based company focused on battery production for energy storage systems and commercial mobility markets, including marine applications and commercial vehicles [2] - The company is developing a large battery manufacturing plant called Giga America in Georgia, USA, and has a customer qualification plant in Norway utilizing SemiSolid technology from 24M Technologies [2] - FREYR has suspended work on the Giga Arctic plant in Norway to minimize capital expenditures and preserve cash reserves, focusing instead on policy solutions to compete with US incentives [2] - The company has entered into agreements with partners, including a conditional offtake agreement with Powin and a joint venture with Nidec Corporation for lithium-iron phosphate battery cells from 2025 to 2030 [2][3] Recent Performance - FREYR is currently facing cost pressures from Chinese manufacturers in the energy storage systems segment, which may affect their strategy to differentiate their products in the US market [6] - The company ended Q2 2024 with $221.5 million in cash and no debt, providing a healthy cash position for at least 2.5 more years at the current spending rate [7] - Management aims to extend cash liquidity to 36 months by implementing cost management measures for capital expenditures related to their facilities [8] - In Q2 2024, FREYR reported a net loss of$27.0 million, compared to a net loss of $25.5 million in Q2 2023, while total operating expenses decreased by$3.2 million due to cost-cutting measures [10][11] Outlook - The company aims to achieve first revenues and positive EBITDA by 2025, contingent on the completion of the Giga America plant, which is expected to have a capacity of 34 GWh [14] - The current share price is below cash value, indicating that skepticism regarding revenue and commercialization milestones is already priced in, suggesting potential for significant upside with positive announcements [14][18] - A clear timeline for the full operation of the Giga America plant could shift market sentiment positively [14]