Norwegian battery co. Freyr partners with Koch to build U.S. factory

Tom Jensen, FREYR CEO and Co-Founder, and Jeremy Bezdek, Koch Strategic Platforms Managing Director, discuss their recent partnership and plans to build a U.S. factory by 2023.

Video transcript

AKIKO FUJITA: Norwegian battery maker FREYR is aiming to become one of the largest battery cell manufacturers in the US. The company recently announced a joint venture with Koch Strategic Platforms to build out a gigafactory right here in the US. Let's bring in Tom Jensen. He is FREYR's CEO. And he's also joined by Jeremy Bezdek, who is KSP managing director. And it's great to have both of you on today. Tom, let me start the question with you. Why did this partnership make sense for you? And what does it mean long term for the footprint in the US?

TOM JENSEN: Well, first of all, thank you for having us. And it's a pleasure to be here, of course, and a pleasure to be here with Koch Strategic Platforms. And we announced last week the joint development company and joint venture with Koch Strategic Platforms to develop an initial 50 gigawatt hours of capacity in the United States. We listed on the New York Stock Exchange earlier this year, given that-- or we believe to succeed in the battery space, you need three things. You need to build at scale, you need to do it at speed, and you need to be sustainable to deliver the most sustainable batteries to basically decarbonize transportation and decarbonize energy systems.

But to do that, you need to be very proficient in building industrial solutions. And Koch Strategic Platforms invested in FREYR when we went public on the New York Stock Exchange. And then we took the dialogue further and very happy to make the announcement last week.

AKIKO FUJITA: Yeah, Tom, talk to me a bit more about the battery you're developing. You're not expected, as I understand it, to have a product on the market until mid-2022. What makes your product unique from some-- what your rivals are developing right now?

JEREMY BEZDEK: So, first and foremost, we are actually developing or building capacity based on a US-based technology, a technology that comes out of MIT. It's called 24M Technologies. So this is US technology that we're initially developing in Norway. And now we're taking the blueprints of those development plans in Norway and replicating them together with Koch in the United States.

What is really disruptive and new about this technology is that it fundamentally simplifies the way in which batteries are produced. And that is something that will allow us to both increase energy density and reduce cost at improved safety rates at the same time. So this is one of those made-in-America moments where we can really take batteries to scale close to home. And this is an energy security or security of supply situation in critical energy infrastructure. So we're super excited about it and very happy, again, to be partnering with Koch in this regard.

ZACK GUZMAN: Yeah, and Jeremy, I guess, you know, people might hear the name Koch and not necessarily think off the top battery EV power here. But when you kind of look at what's being offered by this route, right, we see a lot of people wanting to go ahead and develop full stack everything in there, the battery themselves. What drew you to this company's approach and what they're trying to build out?

JEREMY BEZDEK: Yeah, no, traditionally, we're in all forms of energy as Koch Industries. And we've started to look at the electrification of transportation as an interesting place to deploy some capital. We got to meet Tom's team at the beginning of this past year. And like Tom mentioned, we invested in their business combination with Alussa Energy.

And just, quite frankly, very excited about what capability they bring to the table to build battery cell production in Norway. And then as we started talking about the US market, felt like we could help them with capability that we have to really copy and paste what they're doing in Norway here in the States.

AKIKO FUJITA: Jeremy, let me follow up on that point that Zack just made because you are the investment arm of Koch Industries, which has had, traditionally, presence in oil and gas. Do these verticals run completely separately, or do you see them almost as complementary? In other words, you're investing in technology for energy transition that could potentially help the oil and gas industry transition quicker to cleaner energy.

JEREMY BEZDEK: Yeah, we put together a vertical that we call energy transformation. And the goal being is to deploy capital to help companies grow in this space. We call ourselves growth equity players. We bring capability to help them as well. We do believe it's complementary, what we're doing with our investment vehicle, with our traditional businesses. And we look forward to continuing to find opportunities where we can invest around tailwinds, industries that have the opportunity to grow in the future.

ZACK GUZMAN: Yeah, and I guess, you know, as we watched all these companies go back and forth around this, Tom, you were kind of talking about the speed to market and really rolling this out. 24M, partnering with them, versus kind of building everything out yourself here in terms of the technology backing it. That's been kind of a pro and con, depending on how it's gone for companies out there. We've talked a lot about battery issues at some other major auto manufacturers. But how important is it to eventually maybe own the tech outright here? Talk to me about that partnership with 24M.

TOM JENSEN: Yeah, so our partnership with 24M is a very strong one. So we already have a very strong license to produce these products in Norway and in the European economic area. And the joint venture company that we're establishing together with Koch Strategic Platforms also gives us strength around deploying this technology in the United States.

So, for us, 24M has a very sensible licensing strategy with select strategic partners in key geographical regions. We are the first partner for them in Europe. And now with Koch Strategic Platforms, we are the first partner for them in the United States to deploy it at scale. And ultimately, as you point out, if you want to develop battery cell technology from scratch, it's going to take a very long time to do so. And there is no guarantee that you're going to be able to scale it profitably.

Now the good news about 24M Technologies is that it's already in commercial deployment in select countries in Asia. And being the first mover in Europe and in the United States, together with an industrialization muscle of Koch Strategic Platforms, is, in our opinion, a very strong position to be in. And we aim to grow from there. So we're super excited about it. And this market is just exponentially growing. Batteries are in high demand. And as long as you produce batteries, they will find an outlet. That's our very strong conviction.