FREYR Battery (FREY) on Q3 2021 Results - Earnings Call Transcript
Operator: Hello, and welcome to FREYR Q3 2021 Earnings Release and Conference Call. Throughout the call, all participants will be in listening-only mode. And afterwards, there will be a question-and-answer session. Today, I am pleased to present our first speaker, Vice President or Investor Relations, Jeffrey Spittel, please begin your meeting.
Jeffrey Spittel : Good day and welcome everyone TO FREYR Battery's third quarter earnings conference call. With me today on the call are Tom Jensen, our Chief Executive Officer; and Steffen Føreid, our Chief Financial Officer. During today's call management may make statements related to our business that are forward-looking under Federal securities laws, and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to our filings with the Securities and Exchange Commission, which are available on the Investor Relations section of our website and the earnings press release issued earlier today. Additional information will be made available in our quarterly report on Form 10-Q for the quarter ended September 30, 2021 and other reports that we may file with the SEC. With that, I'll turn the call over to Tom.
Tom Jensen : Thank you, Jeff. And good morning, good afternoon and good evening, wherever you might be dialing in from. It's a pleasure of course for me to be having this second earnings call for a third quarter earnings, and to give you important updates on the progress of our business. And to just sort of skip through to the most important part. We are experiencing tremendous commercial momentum in the rollout of clean battery solutions worldwide. And I'm very happy to be speaking to you today to give you more insight into all the hard work that the passionate and dedicated people at FREYR have been working on since the last earnings call. FREYR is making a significant progress towards our commercialization efforts. We are making commercial and strategic progress across the board. We're building out the operational foundation to deliver an increasing number of battery cells into an exponentially booming market. And we're developing and financing our expansions to scale to basically ensure that we can be relevant for the customers in time. So we are today announcing that we're negotiating offtake agreements in excess of 150 GWh in cumulative volumes between 2023 and 2030. This will start deliveries already in 2023 and increase on an annualized basis leading up to 2030. In addition to this we have a broad and expanding pipeline of opportunities across all market segments. And I'll go into depth around our focus on the customer front. Earlier this year in October, we announced the joint venture that we have established with Koch Strategic Platforms. We're progressing into development of that joint venture and we'll get back to how we are thinking about expanding, capacity expansion to build into this exponentially growing customer base. We are also then accelerating our capacity expansion also in Finland, which we announced in the last earnings call. And both of these, coupled with our progress in Norway, give us a strong and diversified production base to deliver the world leading battery cell solutions. We are on track with the development of our Customer Qualification Plant, and we're all schedule for starting that up in the second half of next year. We're also very pleased today to announce that we have entered into a supply agreement with Glencore for initial cobalt needs all the way through to 2028. We will then be making the concept selection or we have made the concept selection I should say for our first commercial facility, with a target of startup in the second half of 2023. And we're now combining the development of Gigafactory 1 and 2, as has been alluded to in previous calls. We are accelerating the debt-based financing solutions to support the Final Investment Decision on that joint development. And we're going to make that Final Investment Decision during the first half of 2022 being on track for startup of a production in the second half of 2023 as we previously communicated to the market. Let me then go into the overview of our commercial progress. So we are basically seeing that the market short environment accelerating rates. That gives us an opportunity generally speaking to high grades of customer portfolio, as we are preoccupied with driving value of the batteries that we produce, as opposed to just producing volumes for volume sake. And if I then take you through the funnel of opportunities that we have in the making, we are today announcing that we have two conditional offtake agreements in advanced stages of negotiations. These two are globally leading companies in the ESS space and in the energy space in general, and the total demand between 2023 and 2030 from these two customers alone exceeds 50 GWh of potential demand. On top of this, we have 7 offtake agreement negotiations ongoing, which in total adds an additional 100 GWh of demand potential in the same period on top of the 50 GWh that we now have in final stages of negotiation. We also have a top 25 prospective customer list. And these customers are increasing their demand projections with us every time we speak to them. And we are now in technical review with all of them all under NDA and the total need for these customers on aggregates add up to more than 3 terawatt hours of cumulative demand between 2024 and 2030. We don't anticipate of course to be able to deliver all of that anticipated demand, but we are increasingly certain that we will be a irrelevant supplier into that customer base as well. On top of all of these developments, we have more than 60 prospective customers in addition, many of which are now also under NDA and starting technical review. They are European and U.S. based predominantly companies, but also select Asian companies that are coming into the U.S. and European markets across the EV segment, the ESS segment and the mobility segment. Being a provider of clean battery solutions with a diversified production footprint across Norway, Finland and the United States with a world leading technology in 24M is providing a lot of interest in what we are delivering and we're very happy today to be announcing that we've made substantial traction on the commercialization of our offering. So developing a sustainable supply chain is core to having a low cost decarbonized supply of clean battery solutions. And we are therefore extremely proud to be announcing the cobalt agreement that we've entered into with Glencore. We've contracted up to 1,500 metric tons of sustainably sourced cobalt metal cut cathodes. These will be produced at Glencore's Nikkelverk facility in Norway. We have a joint ambition to reach a 100% decarbonization of cobalt and other battery materials, and we will now increase our efforts together with Glencore to look into other supply sources into our battery ambitions in Norway and the Nordic and the U.S. region. This again, underscores the importance of having a localized and decarbonized value chain for battery production. As mentioned many times before, we fundamentally do believe that the success of battery production is a function of having access to low cost decarbonized raw materials and then using world-leading technology to convert such raw materials in a low-carbon power environment to world leading battery solutions. This is one important and initial step, which will be followed by many with Glencore and others to develop a fully localized and clean Nordic battery value chain and supply chain. So, our roadmap or roads to commercialization started, of course, when we had the honor and privilege of listing on the New York Stock Exchange on July 8th this year. And quite a lot that's happened since, and it's not that long ago, since we actually became a known to the battery industry from a listed on the New York Stock Exchange perspective. Since then, Koch Strategic Platforms and FREYR have announced the formation of our joint venture. And we've also announced that we are investing into 24M Technologies, adding additional exclusivity protection around the technology for deployment in the U.S. We have now made the concept selection, what we refer to internally as Decision Gate 2 for our first commercial Gigafactory, and that is now a combination of what we previously labeled Gigafactory 1 and 2, we are developing that now in one-go, with increased throughput capacity relative to what we stated earlier. We will then continue to add offtake agreements to the ones that we are indicating today, so that we fill up capacity in our Gigafactory 1 and 2, and also add capacity to further capacity expansions. The visibility we have on offtake today makes us sold out on the first Gigafactory 1 and 2 up until 2030, which then triggers us to accelerate the development of additional capacity expansions beyond Gigafactory 1 and 2. We are making the Final Investment Decision on Gigafactory 1 and 2 sometime in the half of this year. We are optimizing that facility still. We have made the concept selection, and we are still on-track to start that up with commercial production of batteries in the second half of 2023. So, growth in the U.S. We announced earlier this year an initial ambition of establishing up to 50 GWh of annualized capacity in the United States, clean battery solutions together with Koch Strategic Platforms. This joint venture leverage the existing relationship with key potential U.S.-based customers and obviously it gives us access to one of the largest private enterprises in the U.S. and they have very strong presence across the energy space with logistics, energy competence, building large facilities and, of least, their presence in and connections with core customers and different partners along the value chain for developing large-scale battery solutions in the U.S. We have together with Koch Strategic Platforms aligned strategically with 24M Technologies, the technology platform that we will be using to build batteries across all market segments, not only ESS and commercial vehicles but also across electric vehicle platforms. This is increasingly a platform, which we believe is very strong and deeply competitive relative to conventional lithium ion battery technology and we're super excited to accelerate deployment of capacity expansions in the United States, together with again Koch Strategic Platforms. On top of this, as also mentioned earlier this year, we have entered into initial agreement with the Finnish Minerals Group as well as the City of Vaasa. We have 90 hectares of tie-in developmental acreage just outside the City of Vaasa, which we're now going to accelerate in terms of developing viable value proposition and business concepts to expand capacity also in the Finnish region. This marries up very well with access to localized and regionalized raw materials, which there is plentiful of in the Finnish region in addition to a broad variety of other critical input factors for battery cell production in Norway and Sweden. We are very excited about having an additional footprint in the Nordic region and that will be another area where we can expand capacity again feeding into an exponentially growing customer base. So, we are on schedule for the Customer Qualification Plant. And as you can see on this picture, the beauty of the 24M Technology is that we can establish capacity inside existing manufacturing facilities or inside already established large scale buildings. This is a 13,000 square meter building which we secured earlier this year. And we're on track to install Norway's first large scale lithium ion battery production facility which will be an actual industrial scale production line of the 24M Technology. All the critical path equipment is scheduled for delivery in the first half of 2022 and we're on track for combining all of those pieces together and starting up production of the 24M based batteries in the second half of 2022. As also mentioned, based on the learnings and the insights that we're getting through the Customer Qualification Plant development, we have now decided to combine the development of Gigafactory 1 and 2 into one larger development. We have an 18,000 square meter foot a little bit north of where this building is located. And we are targeting to build out at least 8 production lines of the similar size equipment that we're installing into the Customer Qualification Plant. In our communication to investors earlier, we believe that Gigafactory 1 and 2 will have a combined capacity of 13 GWh in actual throughput production annually. We now see based on the knowledge we have on the production facilities that we are increasing that throughput capacity quite substantially over and above the 13 GWh that we have mentioned before. We're proceeding towards the Final Investment Decision. We have made the concept selection earlier this -- or last week and we are really excited about moving forward towards the Final Investment Decision of Norway's first commercial Gigafactory of double-digit gigawatt hour output. Now, on the raw material supply, I've already mentioned the agreement with Glencore, which beyond securing a critically important input through the 1,500 tons of cobalt also points direction to collaborating with Glencore on other metals and metal sulfates et cetera that we need to go into our production. But in addition to this, we have already secured 5 out of the 13 inputs we require to the Customer Qualification Plant through our partner ITOCHU and the sub-suppliers that are already approved suppliers into the 24M process. The remaining 8 is well advanced and we are on track to ensure that we have sufficient and relevant qualified material to produce the initial batteries in the Customer Qualification Plant. We will be speeding up and accelerating our efforts to localized and regionalized battery cell supplier, or battery cell raw materials suppliers, I should say, into our Gigafactories. And the Glencore announcement is one important step in that regard. But we will now be gradually also announcing to the market additional partnerships to basically ensure that we have localized and regionalized and qualified raw materials going into our commercial facilities. We're also well advanced in examining downstream integration. Both modules and pack partnerships are now in advanced stages of negotiation, and discussion. And we will also be adding a module facility coupled with our cell manufacturing facility in Gigafactory 1 and 2. So in all, we are expanding our presence up and downstream from the cell manufacturing footprint. And we're seeing that the attractiveness of FREYR as a partner being both a customer and supplier of clean battery solutions and clean battery raw materials into cell production is something that is resonating with all of the major players in this space. So, let me then just remind our investors about why we are so excited about the 24M Technology. So the 24M Technology as all now have come to realize is an MIT spin-off, more than 12 years in the making, and I have fundamentally revolutionized not only how the battery cells are designed, but also more importantly, how they are produced. The innovative design provides us with an opportunity to build thicker electrodes, which will dramatically reduce material costs and also allow us to put more energy carrying material into the same volumetric unit of final battery solution. It is highly flexible and can be deployed at multiple different scales across not only the ESS market and commercial mobility markets but also in the EV market applications. We are very excited about the development of the technology pertaining to the EV space. And we see increasing interest and attention from the large automotive OEMs around the 24M Technology. As also mentioned before this is a chemistry-agnostic or chemistry flexible platform that can feed into the existing supply chain. So we can produce NMC batteries, LFP batteries, any known chemistry being used in conventional lithium-ion battery cell production today, while also offering a bridge into future metal anode solutions or solid state solutions over time. The really important innovation in this production platform is that it fundamentally reduces the footprint and the complexity of producing lithium-ion battery cells. We're going from 15 to 5 production steps. And with that dramatic reduction in footprint, which is more than an 80% reduction in footprint, 50% reduction in CapEx, substantial reduction in energy consumption and labor cost consumption, provides us not only with an opportunity to provide more cost-effective solutions to our customers but it allows us to optimize the production of batteries further as we move into the future, where still improved energy densities, improved cycle time, improved charge rates and, of least, reduced costs will be a requirement to basically deliver into the energy translation that is upon us. Finally, this is a more sustainable solution as we will have limited waste in the production if at all anything and the ability to recycle any of the production waste we have is dramatically better than that of conventional production. And since we're not using solvents and the binders, but we are using the electrolyte as the solvent and the binder, we basically have a much less chemically sort of let's call it a challenged final product, which also allows for ultimate recycling to be done in a much better way. So, we are very happy with our relationship with 24M. This is a step into the future. It offers a step change performance and cost improvements relative to conventional production. And we are very excited about this technology and very excited about being the company to take it to multiple gigawatt hour scale in Europe and United States. Let me now hand it over to our CFO to take you through the third quarter earnings financial aspects before I conclude with some concluding remarks. Steffen?
Steffen Føreid: Thank you, Tom. And good day, everyone. It's a pleasure to be here today. At the end of the third quarter FREYR had $623 million in cash and cash equivalence on its balance sheet. This is up substantially from the previous quarter, mainly due to the $644 million in net proceeds received from the business combination of Alussa Energy in July. The increase is partly offset by an operating cash outflow, investments in the Customer Qualification Plant, and demerger payments, totaling approximately $33 million in the quarter. Our main financial priority short-term is to minimize the use of cash, while we build the organization and secure customer offtake. We recruit selectively and manage external costs closely and expect the fourth quarter SG&A expense to be roughly in line with third quarter. Medium term, our financial priority is to secure funding solutions that supports the Final Investment Decision for Gigafactory 1 and 2. The plan is to raise financing in the debt capital markets from our commercial banks and expert credit agencies. We have engaged banks and have constructive dialogues with several potential lenders. As we accelerate our efforts to secure financing for the first commercial plant, we will seek a flexible, cost efficient and sustainably-linked financing solution, allowing for speed and execution and supporting our timeline. Longer-term, we will seek to diversify sources of funding and optimize our capital structure as we execute on this strategy. And on that note, I'll turn the call over to Tom for closing remarks. Tom?
Tom Jensen: Thank you, Steffen. So to summarize and to sort of take you through our current priorities, we are on-track to establish 83 GWh of annualized capacity of clean battery cell solutions by 2028. We can now deploy opportunities not only in Norway, which we’re well advanced in developing, but also in Finland and United states. And we will be looking into acceleration options for establishing that capacity, building on the knowledge and the footprint that we are establishing in Norway. We see very strong customer traction building and we are very pleased today to announce initial insights into our customer funnel which now already have 9 customer engagements in offtake agreement discussions, 2 of which are in very advanced stages. In combination, these 9 agreements add up to more capacity that we are developing in Gigafactory 1 and 2. We will keep adding momentum to that across the ESS and commercial mobility segments and also expand into the EV market as we're moving towards the Final Investment Decision for Gigafactory 1 and 2 in Norway. It's important for us to diversify our production footprint and this is also something that our customers are valuing greatly. To have a localized production footprint gives opportunity to have security of supply in local markets which is going to be increasingly important for many of the large companies that we are in dialogue with across the ESS, commercial mobility and EV spectrum. Finally, we are extremely preoccupied with driving capital efficiency. And as our CFO alluded to, we will be pursuing sustainably linked financing options and also have a diversified capital base over time. We will optimize plant configurations and supply chain to generate strong returns. Having a localized and decarbonized supply chain is fundamentally important to drive down costs but also to drive down the CO2 footprint on the lifecycle basis of the batteries we produce, which ultimately is going to be core to the decarbonization of transportation and energy systems globally, the market segment in which we are fundamentally delivering world leading solutions into. So with that, I open up for any questions or comments that any of our investors might have. But we are super excited about the progress to-date. And we look forward to keeping you up to speed on a running basis or progress moving forward. Thank you for your attention.
Operator: Our first question comes from Evan Silverberg with Morgan Stanley.
Evan Silverberg: Hi, all. Evan Silverberg on behalf of Adam Jonas. I'm curious if you guys could give some commentary on global supply chains and what you guys are seeing. Obviously, it’s been headlines a lot lately. Curious if there's any risk to that to 2, 2.5 ‘22 start for the Customer Qualification Plant? And then Gigafactories 1 and 2?
Tom Jensen: Thank you, Evan. Great to hear your voice again. So various -- good question of course. Not surprised that you're posing it. So as I tried to allude to in the presentation, we will be having 13 different suppliers into our Customer Qualification Plant. And all the volumes that we require are secured for 5 of them. And we are in closing stages with the remaining 8. So we don't see any risk of any supply shortage of materials going into the Customer Qualification Plant which as you know is scheduled to come on stream in the second half of next year. Now include the total, that is a smaller volumetric requirement of raw materials and when we move to the Gigafactory 1 and 2 scheduled to start a production in the second half of 2023, we would obviously need to scale up that supply chain. That is something that we've already started on quite a long time ago, both looking into the existing qualified suppliers, and how we can debottleneck and scale up their supply into our facilities. But coupled with that, we are in advanced stages with multiple different parties on the cathode active material side, anode active material side, electrolytes, copper foil, lithium hydroxide, lithium carbonate, anything and everything we need for LFP batteries and NMC batteries for a localized production footprint over time. So, so far, we are confident that we're going to be able to either scale up existing suppliers that are approved, get to the sense we're in process and/or combining that with localized developments, be it with existing cathode or anode material providers that are already present in the European realm or Asian suppliers that wants to establish presence either in Finland or in Norway. So all-in-all, we are confident that we're going to be able to unlock the raw material supply chain. But as has been pointed out by many people, and stakeholders in the battery industry, this is a fundamentally important area for the whole battery industry to focus on. And we are collaborating with other cell providers and other sort of stakeholders to ensure that timely and sufficient raw material capacity is added in time for the battery cells to come online.
Evan Silverberg: One more follow-up if you don't mind. Specifically within the United States, labor has been a big topic lately. Can you give a little commentary on how the hiring has been going and any overall color on the Norwegian labor market right now?
Tom Jensen: So, clearly, competence is going to be critical for any business that is scaling as rapidly as ours. Now FREYR is in this peculiar or not peculiar, but special situation that we were in our own earnest, very startup company at the beginning of the year. We're still a startup company, but we’ve eight-folded capacity in the last 10 months. And that has, of course, required a lot of effort. But it just shows that we have been able to tenfold our own capacity, be it from small base, but with relevant competence, across project execution, operational excellence, battery cell and product engineering, et cetera. And we're continuing that journey to expand our capacity base on a running basis. Now, when it comes to the U.S., I think it's a little bit too early for me to have any very specific news on this beyond the fact that we have started our joint venture approach together with Koch Strategic Platforms. So we’ve populated the initial work, leading up to concept selection and ultimate Final Investment Decision for the first Gigafactory development for the joint venture in the U.S. sometime next year. And we are of course leveraging the Koch Strategic Platforms and Koch network as much as we can. But we will obviously also now and have started the outreach to various different locations and jurisdictions where we are investigating the potential establishment of capacity. And so far, the interest in what we're doing is very strong. But we do not underestimate the challenge of attracting the appropriate level of competence, nor do we underestimate the need for us to also educate, let's call it operators from other industries. But so far, so good, I would say of them. But this is a topic that, you should pay attention to it because we are paying attention to it. And we will not underestimate the challenge.
Operator: Our next question comes from Greg Lewis with BTIG. Please go ahead.
Tom Jensen: Greg?
Operator: . We will move on to the next question for now, that is from Maheep Mandloi from Credit Suisse. Please go ahead.
Maheep Mandloi: Maybe we can just start on the customers over here. So thanks for the clarifications on those 2, on the ESS and the energy industry. Can you just talk about the other 7 in the early stages, which end markets do they serve and how do you think about kind of their customer qualification process, their supply qualification process, timelines? Thanks.
Tom Jensen: Yes. So great. So let me generally speak about the 9, right? 2 of them are more advanced and they are in the ESS realm. But among the 9, there is both ESS and commercial mobility customers, and it's both LFP, but predominantly LFP batteries but also NMC based batteries. So, that's why we're also excited about the cobalt agreement with Glencore. So, generally speaking, the process is as is with conventional batteries, you go through the ABCD cycle. We already have the opportunity to provide, of course based off on the 24M process, but also sample cell not only from 24M but also from select sister or brother licensees that we have in Asia. And we have also strengthened our relationships with them. And then as the Customer Qualification Plant comes online, we will obviously go further into the ABCD, SOP kind of qualification process with batteries produced on site. So, the general nature of the qualification process in the ESS space and in the commercial mobility space is generally shorter and quicker than that of the automotive space, even though there are initiatives ongoing in the EV space as well, to try to shorten the timeline for the qualification processes, and that is done through a combination of materials, but also through advanced, let's call it algorithmic data modeling and sort of early monitoring of cycle life and performance metrics on the cells that they come out of production. And the sort of final thing I'd like to say about that is, I think it's fair to assume that the 24M production platform is a faster production platform, which allows us to iterate faster and also allows us to generate data quicker. So, over time we do believe that this technology could also enable us to actually shorten the qualification timelines by providing data and comfort around the solutions earlier and quicker than that has been the norm in the conventional technology today. So again, 9 customers, ESS, commercial mobility, but in the 25 top customer prospects that come on top of that all under NDA and all in technical review and discussions as we speak. This also pertains to the EV industry. So, we are quite excited about the development, and looking forward to keeping our investors and of course the broader constituency updates about progress on the customer side as we move towards the end of the year.
Maheep Mandloi: And if I may just move on to the big giga line on Giga 2, can you maybe just talk about like what's driving that higher throughput? It was interesting you talked about more than 13 GWh. Can you quantify how much that is and what's driving it? And just to also understand the CapEx needs for the 2 Giga factories combined now?
Tom Jensen: Yes. So we are moving towards the Final Investment Decision and we will be making the Final Investment Decision in the first half of next year or sooner rather than later, but we need to go through a number of different steps to ensure that we can optimize both the total cost of it in a let’s call it inflationary environment. So we're trying to sort of avoid of course the worst impacts of that but anyone with a virtual screen, obviously, realize that we have been through a fairly hectic inflationary time. And now certain of the input factors and costs that go into perhaps are starting to normalize. So we're trying to optimize for the cost structure there. So we're not going to go out with any updated CapEx numbers at this time. But when it comes to the configuration itself, and we have made the concept selection, so obviously, we have been learning quite a lot from the Customer Qualification Plant development and the design phase, if you like, of the casting unit cell assembly machine, which is the heart of the transplant process, and, let's call it, relevant upstream and downstream developments that go with that. That has allowed us also to in iterative dialogues with our customers, which we've been quite clear on in previous conversations with our investors, but this is an iterative process where we come with this new lithium ion battery solution that’s staying in the existing realm, offering the opportunity to build larger electrodes and better electrodes with more energy carrying material in it. So that has then allowed us to optimize the size of the cells that we intend to produce. And that increase in size of cells, coupled with the increase speed that we think we can implement in the 24M Technology, allows us to increase throughput of the combined facility. In addition to this, we are adding a module facility. So we're building modules to pack around the cells, which is increasingly important for many of our ESS customers. That module facility is a CapEx-light facility, I mean relative to the battery cell facilities, but adds roughly 30% in revenue on top of the cell revenue that we will get from the cells. And that improves the margin picture for the totality of the equation. So when it comes to the excess throughput capacity that we're going to come -- that’s going to come out to it and we're not ready yet to sort of quantify that specifically, but it is in the double-digit percent increase for sure. How much up we're going to end up at? Is still sort of a macro optimization. So we'll come back to the market when we have more precision around that, which will be -- we will be announcing leading up to and concluding with the Final Investment Decision again in the first half of next year.
Maheep Mandloi: And just one last one from me on the -- I assume the cash usage in the near-term for Q4, should we expect the same 30 million range for cash burn and similar run rate until the Gigafactories start on a quarterly basis?
Tom Jensen: Yes. So generally speaking, as our CFO alluded to in the call, we will roughly have the same SG&A burn in the fourth quarter as we have in the third quarter. But maybe it's Steffen you want to add some color to this, so the CFO can comment additionally on this. Steffen?
Steffen Føreid: Yes, I can do that. Thank you. So that's correct. Approximately the same G&A in the fourth quarter. But I'll just like to make the point that in the 30 million, that includes about almost 10 million in share-based compensation, right? So the cash effect is less, but approximately the same level.
Operator: Our next question comes from Jacob Green with BTIG.
Jacob Green: Hi, guys. Sorry, I was having some technical issues, but just a quick one for me. So looking at your offtake agreements and your prospective offtake agreements for 150 GWh, is there any way to think about the cumulative demands over a time period? Any way to think about that?
Tom Jensen: Yes. So just to be clear, the 150 GWh is a cumulative demand from these 9 customer engagements between 2023 and 2030. And by 2030 or leading up to 2030, I should say, the total demand actually exceeds the capacity that we aim to produce from Gigafactory 1 and 2 as we see it today. And when we couple that with the accelerating momentum that we're seeing from the top 25 customer list, that triggers us to develop more Gigafactories as soon as we can in Norway, Finland and United States. But there is -- I mean, the market short, as we have been talking about for quite some time, maybe in particular, in the ESS and commercial mobility space is increasingly being manifested. And our customers are increasingly worried or preoccupied with securing supply as quickly as they can, also from localized sources of production. So, that is a very good situation of course, from a battery cell producer’s point-of-view. But it also underpins or underscores the challenge that the battery industry will have moving forward that a market short environment while positive from any aspects does underpin the fact that shortage of batteries can be a function of shortage of raw materials, et cetera, as also alluded to in previous question. So, we will now accelerate across the board. We have had this value chain approach all along, that is now bearing fruits, I should say, both in terms of partnerships establishment upstream from cell production, but also when we're branching out into module and pack partnerships, and module production as well with our Gigafactory 1 and 2 development that is increasing the opportunity to sort of develop tailor-made solutions to a larger extent for our customers. And the final thing, having the opportunity to diversify geographically and getting closer to the customers, but also having a diversified supply base increases the opportunity for us to accelerate development of new capacity. So, hopefully that sort of gives some more color to that. We will be coming back to the market with more specifics around Gigafactory 1 and 2 and obviously subsequent Gigafactories in Norway and Finland and the U.S. when we have some more definition around that. And that again will be, as it has been to-date, iterative processes between ourselves and our customers, our raw material providers, as well as potential developments of conventional technology in joint venture construct in the Nordic region, maybe predominantly. And there is very strong interest from conventional Asian battery cell producers to establish partnerships with FREYR in a local let's call it Nordic environment to supply the exponential growth in demand also from the EV producers in Europe, because they still rely heavily on imports from Asia, even though there is a number of initiatives on the cell side in Europe, obviously not all of them will materialize. And we are increasingly being regarded as a credible provider of solutions, and we are getting stronger and stronger by the day. So, you should expect more in that area also from FREYR moving forward. But right now, we are excited about the traction we have around Gigafactory 1 and 2 and the commercial ramifications of that 150 GWh that we have under, let's say, advanced and final stages of negotiations as we speak. Again, more than fill up that capacity until 2030. And so, then we will be complementing that to then trigger development of new capacity.
Jacob Green: Great. Great. Thank you for that. And then as far as the supply of -- your cobalt supplier, Glencore for the 1,500 metric tons, is there any way to think about that and the gigawatt hours of battery produced?
Tom Jensen: Well, I mean, they are basic rules of thumb, right, on this one, in terms of how much cobalt you need into NMC811 type solutions. And it's probably the NMC811 solution that we will be producing for the customer base in question. We don't want to be very specific on this as of just yet. But I can say that, for the cobalt that we have secured is currently sufficient to provide the cobalt needs for the NMC volumes that we aim to produce in Gigafactory 1 and 2. But it's not more than just about. So -- but that is of course a good starting point for us. We do see a lot of LFP demand coming, and of course the 24M Technology is chemistry flexible, so we can produce both. We will obviously tailor-make production lines to LFP and then tailor-make production lines to NMC. Even though we can't swap flexibly between them, we would like to avoid that to ensure that we have the absolute highest up time in each of the production lines that we have. But right now, the cobalt supply is sufficient for the NMC based volumes that is in our let's call it offtake agreement definition as we see it today. But this will probably also increase, we do believe that, NMC. We will have a role to play also in ESS and mobility and of course the EV solutions moving forward, even though LFP is more and more important for a broader variety of market verticals and segments. So all-in-all a good step forward on the commercial front and a good step forward on the operational facing front and a good step forward on the raw material supply front.
Operator: We have no further questions. I hand it back to our speakers.
Jeffrey Spittel: Thank you, operator and thank you everyone for your interest today. We look forward to catching up with you over the remainder of the year, both virtually and now in-person on the conference circuit on the road. So we'll see you all soon. And please feel free to reach out to us with additional questions and feedback. Thank you very much. This will conclude the call.
