FREYR Battery (FREY)- IRA presents significant opportunity;upgrade to Buy此为英文文档

_esentssignicantopportunityupgradetoBuyFREY12mPriceTarget:$19.00Price:$10.22Upside:85.9%InflationReductionActcouldreduceGigaAmericacapexby>60%-WeseeFREYasastrongbeneficiaryfromtherecentlyenactedInflationReductionAct(IRA)intheUS.FREYaimstobuilda35GWhgigafactoryinpartnershipwithKochStrategicPlatforms(KSP)thatissettostartproductionin2025.LookingattheIRAinmoredetail,weseeapotentialcapexreductionforFREY’supcominggigafactory(GigaAmerica)by>60%.GivenFREY’sinitialfocusonLFPbatteries,wealsoseestrongpotentialfromthenewITCforstandalonestorage.LookingatthecompetitivelandscapeintheUS,FREYissettooperatethelargestgigafactoryoutsideoftheOEMs’dedicatedEVbatteryplants.GigaArcticsettobemostcapitalefficientandsustainablegigafactoryintheworld-SinceweinitiatedcoverageofFREYonJune20,2022,thecompanyhasmadesignificantprogressonitsfirst29GWhgigafactoryinMoiRana,Norway(GigaArctic),andwasabletoidentifyprojectfinancingsupportof$1.6bnfromvarioussourcesincludingthestateofNorway(€400mn)andotherECAs($950mn).Theplant’scapitalcostof$1.7bnimpliesacapexspendof$61mn/GWhandabout34employeesperGWh,belowanyannouncedgigafactoryinEuropeandNorthAmerica.WebelieveFREY’sadvantageoncapitalandoperationalefficiencyisdrivenbytheproprietaryuseof24M’smanufacturingtechnology.Morecatalystsahead;PTto$19andupgradetoBuy-WeseeseveralcatalystsforFREY’sstockfortheremainderoftheyear,including(1)siteselectionforGigaAmerica,(2)FinalInvestmentDecisionforGigaArcticand(3)conversionof>125GWhofftakeagreementsintodefinitivesalesagreements.PosttheprogressonGigaArcticandtheIRAenactment,weincreaseourFREYestimatesonbettercapacityassumptionsforGigaArctic.WeupgradetoBuy(fromNeutral)witha12mPTof$19(from$11).+44(20)7051-3084|philipp.konig@GoldmanSachsInternational+44(20)7552-5784|george.galliers@GoldmanSachsInternational+44(20)7774-3395|sian.keegan@GoldmanSachsInternationalMarketcap:$1.2bnEnterpriseValue:$880.3mn3mADTV:$9.1mnUnitedStatesEuropeAutosM&ARank:3Leasesincl.innetdebt&EV?:Yes12/2112/22E12/23E12/24ERevenue($mn)New0.00.045.0468.5Revenue($mn)Old0.00.0156.0469.9EBITmn(75.6)(119.2)(182.3)(246.6)EPS($)New(1.24)(0.86)(1.77)(2.45)EPSOld(1.24)(1.23)(1.48)(2.00)P/E(X)NMNMNMNMDividendyield(%)NMNMNMNMCROCI(2,103.5)(250.4)59.521.8Ndebt/EBITDA(exlease,X)--------3/226/229/22E12/22EEPS(0.30)0.04(0.30)(0.30)GrowthFinancialReturnsMultipleIntegratedFREYrelativetoEuropeCoverageFREYrelativetoEuropeAutosSource:Companydata,GoldmanSachsResearchestimates.Seedisclosuresfordetails.GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgo/research/hedge.html.Analystsemployedbynon-USaffiliatesarenotregistered/qualifiedasresearchanalystswithFINRAintheU.S.__RatingsinceAugRatingsinceAug4,202222E23E22E23E24E1eceivableOthercurrentassetsTotalcurrentassetsNetPP&ElinvestmentsTotalassetsseliabilitiesiabilitiesTotalcurrentliabilitiessTotallong-termliabilitiesTotalliabilitiesPreferredsharesTotalcommonequityMinorityinterestTotalliabilities&equitycapitalemployedW.1Ratios&.124E24E0.00.322E0.182.533.533.5X49.7ROIC(%)ROA(%).038.1.0verXEBITinterestcover(X).8).8).8).8)1122E 30.723E CashFlow($mn)________________________________________24E122E23EEBITDAgrowthEBITgrowthowthEPSgrowthk6(63.1)114.3)FREY($)S&P5007，0003)Cashflow3)tionsDivestituresCashflowfrominvestings5，000.5).5).7).7)0.00.0.00.02.3)1)………………6m22.5%25.4%3m25.4%6m22.5%25.4%3m25.4%20.7%18.8%28.9%TotalcashflowReinvestmentrate(%)Source:Companydata,GoldmanSachsResearchestimates.Source:FactSet.Source:Companydata,GoldmanSachsResearchestimates.eStatementmnEBITDAEBITsPre-taxUprofitsionfortaxesterestNetUinc.U(pre-exceptionaIs)NetUinc.U(post-exceptionaIs)EPSU(basic，Upost-except)U($)nTaxrate(%)DPS($)10.0 (75.5) (75.6)0.3 (93.4)0.0(93.4)(93.4)40.00.022E0 0.000023E0 .0(207.3).0.0.024E.5 .0(286.5)(286.5)45)2.45.0August2_FordSKISDI/STLAAESCBritishvoltLG/GM1LG/GM1CATLSKI/Ford1SKI/Ford_FordSKISDI/STLAAESCBritishvoltLG/GM1LG/GM1CATLSKI/Ford1SKI/Ford2NorthvoltEnvisionLG/GM3FREYRGigaArcticFordWMGigaSKIEnvisionSKI/Ford1SKI/Ford2AESCACCNorthvoltLG/GM2LG/GM3SDI/STLAMicrovastLGESLG/GM1FREYRGigaArcticFREYRcapacitytargets(GWh)$72-63%reduction200150$27$35$27100Europe100$20$10$20$750USMaterialcreditKWhcostpostMaterialcreditKWhcostpostIRAcreditKWhcostincl.materialsModulecreditCellcredit-investmentneed2023EperKWh2026EUS20272023EperKWh2026EUS2027E2028E2029E2030EEuropeSource:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearchE1301409410091851009173777365676767676561676154585450504037434342403734MedianEmployeesperGWhMedianInvestmentinMedianEmployeesperGWhMedianSource:CompanydataSource:CompanydataSource:Companydata,GoldmanSachsGlobalInvestmentResearchAugust3__InflationReductionActcouldreduceinvestmentneedby>60%-WeseeFREYasastrongbeneficiaryfromtherecentlyenactedInflationReductionAct(IRA)intheUS.FREYaimstobuilda35GWhgigafactoryinpartnershipwithKochStrategicPlatforms(KSP)thatissettostartproductionin2025.LookingatthedifferentsectionsoftheIRA,weseestrongbenefitsforboththesupplyanddemandoflithium-ionbatteries.Onourcalculation,theIRAcouldreducecapexrequirementsforFREY’sUSgigafactory(GigaAmerica)by>60%.GiventhatFREYhasdedicateditselftoproducingLFPbatteries,weseestronggrowthsupportfromthenewInvestmentTaxCreditsforstandalonebatterystorage.FREYhasalreadycollected>125GWhinofftakeagreementsforenergystoragesolutions(ESS)withlargeplayerssuchasHoneywellandPowinLLC.LookingatthecompetitivelandscapeintheUS,FREYissettooperatethelargestgigafactoryoutsideoftheOEMs’dedicatedEVbatteryplants.GigaArcticsettobemostcapitalefficientandsustainablegigafactoryintheworld-SinceweinitiatedcoverageofFREYonJune20,2022,thecompanymadesignificantprogressonitsfirst29GWhgigafactoryinMoiRana,Norway(GigaArctic).Mostimportantly,FREYwasabletoidentifyprojectfinancingsupportof$1.6bnfromvarioussourcesincludingthestateofNorway(€400mn),otherECAs($950mn)andcommercialbanks.Theplant’scapitalcostof$1.7bnimpliesacapexspendof$61mn/GWh,belowanyotherannouncedgigafactoryinEuropeandNorthAmerica.Operationally,GigaArcticalsoscreensaheadofpeers,aimingforabout34employeesperGWh,wellbelowthepeeraverageof50.WebelieveFREY’sadvantageoncapitalandoperationalefficiencyislargelydrivenbytheproprietaryuseof24M’smanufacturingtechnology.24Mutilizesanewbatterycelldesignthatseparatestwopremixedelectrolytes,eliminatingseveralcapital-intensiveprocesseslikedryingandelectrolytefilling.Ontopofcapitalcostcompetitiveness,FREYisalsofocusedonreachingindustry-leadingstandardswithregardtoenergycostsanditscarbonfootprint.WebelievethestrategiclocationinNorwayoffersaccesstothemostcostcompetitiveandsustainableenergysourcesglobally.GlobalmomentumtowardsLFPprovidesfurthergrowthopportunity-FREYhasemergedasoneoffewbatteryventureswithafocusonLFP(lithium-iron-phosphate)cathodes.LFPgainedmorepopularityinthepast24months,drivenbyEuropeanOEMs’decisiontouseLFPfortheirentry-levelBEVs,aswellasincreaseddemandforenergystoragewhereLFPismostsuitable.LFPbatteriesarecheapertoproducethannickel-basedbatteries,lessinflammableanddegradeatalowerrate,makingthemhighlyapplicableforenergystoragesolutions(ESS).Weexpect37%/24%oftheglobal/EuropeanbatterymarkettobeLFPbatteriesin2030.Weseeupsidetothesefigures,especiallyinEurope,shouldOEMsacceleratetheirplanstoutilizeLFP.Morecatalystsahead;PTto$19andupgradetoBuy-WeseeseveralcatalystsforFREY’sstockfortheremainderoftheyear,including(1)siteselectionforGigaAmerica,(2)FinalInvestmentDecisionforGigaArcticand(3)conversionof>125GWhofftakeagreementsintodefinitivesalesagreements.PosttheprogressonGigaArcticandtheAugust4__IRAenactment,weincreaseourFREYestimatesonbetteryieldassumptionsforGigaArctic.WealsolowerourWACCto15%(from20%)duetothelargeshareofpublicfinancingsupportforthefirstgigafactory.WevalueFREYat2.5x2025E(discountedat15%WACC)salesandour12mpricetargetincreasesto$19(from$11).WeupgradetoBuy(fromNeutral).August5__OnTuesday,August16th,PresidentBidensignedintolawtheInflationReductionActof2022(IRA)followingitspassageintheUSSenateonAugust7thandtheUSHouseofRepresentativesonAugust12th;aclimate,healthandtaxbillintended,amongstotherthings,totackleenergycostsandclimatechange.Intotal,theIRApresentsthelargest-everinvestmentinclimateprotectionandenergysecurity($369bn)withbothdemand-andsupply-sidemeasures.Section45xoftheIRAlaysoutanAdvancedManufacturingProductionTaxCreditforcomponentssuchasphotovoltaiccells,windenergycomponentsandbatteries.The$30bncreditappliestocomponentsproducedintheUnitedStatespostDecember31st,2022,andwillbegintophaseoutfrom2030.Forthefirstfiveyears,thecreditwillalsoincludeadirectpayoptionthatwillallowproducerstotreattaxcreditsequivalenttopaidtax.Withregardtobatterycellmanufacturinginparticular,thereareseveralbenefitsthatcouldreduceinvestmentneedsby>60%onourestimates.Ifacompanyweretobeverticallyintegrated,capitalneedscouldbereducedbyafurther10%.Atthispoint,weassumethatthesewillcomeintheformofcapexoffsetstosupporttheconstructionofnewgigafactories.Iftheyweretomaterializeasopexbenefits(i.e.foreachproducedcell),wewouldseefurtherupsidetoFREY’soperationsintheUS.Theannouncedbenefitsinclude:1.Batterycells-$35multipliedbythecapacityofsuchbatterycell(expressedonakWhbasis).2.Batterymodules-$10(orinthecaseofabatterymodulewhichdoesnotusebatterycells,$45)multipliedbythecapacityofsuchbatterymodule(expressedinkWh).3.Electrodeactivematerials-Tenpercentofthecostsincurredbythetaxpayerwithrespecttoproductionofsuchmaterials.August6$/GWhFREY/KSP*LG/GM3Envisi$/GWhFREY/KSP*LG/GM3EnvisionSKI/Ford1SKI/Ford2LG/GM1LG/GM2SDI/STLASKIFord_140$72-63%reduction100806040$1020$70KWhcostpostIRAcreditAverageUSinvestmentneedperKWhKWhcostincl.materialsMaterialcreditModulecreditCellcredit$35$27$20120Source:CompanydataSource:GoldmanSachsGlobalInvestmentResearchAugust7__Aspartofitsstrategytoreach>200GWhincapacityby2030,theUSplaysamajorpartofFREY’sgrowthambitions.Outofthetargeted200GWh,managementexpectsaroughlyevensplitbetweenEuropeandtheUS,implying100GWhofnewUSbatterycapacityoverthenexteightyears.Plansforthefirst35GWhgigafactory,viaaJVwithKochStrategicPlatforms(KSP),arealreadyunderway.TheJVhasnarroweditssearchtofivepotentiallocationsandexpectsadecisionbeforetheendoftheyear,followedbyafinalinvestmentdecisioninearly2023.Giventhetimeline,wewouldexpectthestartofcellproductiontofollowinearly2025.AlthoughtheUShasseenseverallargegigafactoryannouncementsinthepast12months,webelievethecompetitivelandscapeismateriallydifferenttoEuropeatthispoint.Sofar,mostgigafactoryannouncementshavebeenthroughpartnershipsbetweenOEMsandestablishedAsianbatterymakers,wheresupplyisexclusivelydedicatedtotheOEM’sfutureEVportfolio.TherehavebeenlimitedindependentgigafactoryplansintheUS,leavingapotentialmarketgap,inparticularwithregardtoenergystorage.GiventhatFREY’sinitialgrowthambitionsarecenteredaroundenergystorageandnotEVs,webelievethecurrentmarketenvironmentpresentsastrongopportunityintheUS.Sofar,FREYalsoappearstobetheonlycellproducerthatplanstomakeLFPbatteriesintheUS,whichcouldproveasausefuladvantageinthefuture,asautomakersbecomemorefocusedonthischemistry.WenotethatCATL,theworld’slargestbatterycellmaker,isplanningtoestablishalargefactoryinNorthAmerica,althoughrecentnewsreportsindicatedadelayinplans.FREYRcapacitytargets(GWh)USgigafactoriesFREYRcapacitytargets(GWh)250200150Europe10050200150Europe10045GWh40GWh35GWh30GWh25GWh20GWh15GWh10GWh5GWh0GWh50US-2023E2026EUS2027E2022023E2026EUS2027E2028E2029E2030EEuropeLightbluedenotesnon-AsianbackedgigafactoriesSource:CompanyLightbluedenotesnon-AsianbackedgigafactoriesSource:CompanydataTheIRAalsoincludesseveralextensionsandnewprovisionstosupportdemandforcleanenergycomponents.MostimportantlyforFREY,thenewInvestmentTaxCredits(ITC)forstandaloneenergystoragecouldlowercapitalcostsbyabout30%.Standalonemeanthecreditwouldapplywhetherthestoragesolutionislocatedtogetherwithsolarapplicationsornot.Also,taxpayersareeligibleforanadditional‘10%domesticcontent__bonusbonus’,whichshouldsupportdemandforbatteriesmadeonUSsoil.Separately,existingITCsforsolarpanels(30%)wereextendedforanother10years,whichshouldalsobesupportiveforbatterystoragedemand.WebelieveFREYRiswellpositionedtobenefitfromthenewstorageITC,givenitsfocusonLFPbatteries,whicharewell-suitedforstorageduetotheirlowercostandbetterlongevity.Secondly,allofFREY’sofftakeagreementssofarhavebeeninthestoragespace(>125GWh),includingmajorUSplayerssuchasHoneywellandPowin.Goingforward,weseepotentialforanaccelerationinofftakeagreementsfollowingtheIRA,duetoFREY’sfocusonLFPandexpectedlocalizedproductionintheUSfrom2025.USbatterystoragedemand(MWh)80,00070,0002560,00050,00040,00030,00020,00010,000502019202020212022E2023E2024E2025E2026E2027E2028E2029E2030E-2023E2024E2025E2026E2027E2028E2029E2030EHoneywellESS1PowinESS2ESS3EuropeanenergyclientCOAslifetimebatterydemand(GWh)ResidentialNon-residentialUtility2030Source:GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearchAugust9_FordSKISDI/STLAAESCBritishvoltLG/GM1LG/GM1CATLSKI/Ford1SKI/Ford_FordSKISDI/STLAAESCBritishvoltLG/GM1LG/GM1CATLSKI/Ford1SKI/Ford2NorthvoltEnvisionLG/GM3FREYRGigaArcticFordWMGigaSKIEnvisionSKI/Ford1SKI/Ford2AESCACCNorthvoltLG/GM2LG/GM3SDI/STLAMicrovastLGESLG/GM1FREYRGigaArcticSinceweinitiatedcoverageofFREYonJune20,2022,thecompanymadesignificantprogressonitsfirstgigafactoryinMoiRana,Norway(GigaArctic).Mostimportantly,FREYwasabletoidentifyprojectfinancingsupportof$1.6bnfromvarioussourcesincludingthestateofNorway(€400mn),otherECAs($950mn)andcommercialbanks.GiventhelargeshareofpubliclendersforGigaArctic,weexpectthecostofdebttositatattractivelevels(<5%),inlinewithotherpubliclyfundedprojectsintheScandinavianregion.Afinalinvestmentdecisiontobuildthefactoryisexpectedlaterthisyearineither3Qor4Q.FREYexpectsGigaArctictoreachanameplatecapacityof29GWh(vs11GWhinitially)andtocarryacapitalscostof$1.7bn.Theplant’scapitalcostof$1.7bnimpliesacapexspendof$61mn/GWh,belowanyotherannouncedgigafactoryinEuropeorNorthAmerica.Also,operationally,GigaArcticscreensaheadofpeers,aimingforabout34employeesperGWh,wellbelowthepeeraverageof50.1309485857777Investmentin€mn7367perGWh6767Median67656114010091675458545050373734MedianEmployeesperMedianSource:CompanydataSource:CompanydataWebelieveFREY’sadvantageoncapitalefficiencyislargelydrivenbytheproprietaryuseof24M’smanufacturingtechnology.Theprocesssimplifiescellproductionfrom15stepsto5steps(80%lessproductiontime)andshouldresultinasignificantcostreductionvsconventionaltechnologies.24Mutilizesanewbatterycelldesignthatseparatestwopremixedelectrolytes(calledcatholyteandanolyte),eliminatingseveralcapital-intensiveprocesseslikedryingandelectrolytefilling.Unlikeinaconventionallithium-ioncell,theseparatorisnon-permeable,preventingdiffusionandeventualhomogeneityoftheelectrolytemixture.Thissemi-solidsolutionreducesthecontentofnon-activematerialsby80%andshouldimprovecycle-life,safetyandcost,withparticularbenefitsforenergystorage.Viaalicensingandservicingagreement,FREYhastherighttounlimitedproductionofcellsbasedon24M’scurrentandfuturetechnology(outsideofJapanandSoutheastAsiathisyear).FREYwillpayroyaltyfeesto24Mdependingonsalesvolumes__((minimumannualpayments$3mn).The24MlicensealsoappliesexclusivitytoFREYinScandinaviaandtheEEA(outsideofnomorethantwolicensesincl.FREY)untilend2023.ThereisanexceptionforgrantstoEV-batterycompaniesthatproduce>500kcarsor>10ktrucks/busesannually.WenotethatVolkswagenacquireda25%stakein24Mlastyearandisplanningtoindustrialize24M’stechnologyforitsownautomotivebatteries.esSource:Companydata,GoldmanSachsGlobalInvestmentResearchAugust11DenmarkGermanyBelgiumSwitzerlandIrelandItalyPortugalSpainAustriaFranceGreeceSwedenFinlandRomaniaEstoniaBulgariaHungarySlovakiaDenmarkGermanyBelgiumSwitzerlandIrelandItalyPortugalSpainAustriaFranceGreeceSwedenFinlandRomaniaEstoniaBulgariaHungarySlovakiaCroatiaNorwayPolandSerbiaGermanyUKItalySpainFranceSwedenFinlandUSAHungarySlovakiaNorwayChinaPoland_sOntopofcapitalcostcompetitiveness,FREYisalsofocusedonreachingindustry-leadingstandardswithregardtoenergycostsanditscarbonfootprint.WebelievethestrategiclocationinNorwayoffersbothverycostcompetitiveaccesstoenergyandalsotosomeofthemostsustainableenergysourcesglobally.Infact,outsideofPoland,NorwayscreensasoneoftheleastexpensiveregionsinEuropewithregardtoelectricitycosts.ForGigaArctic,thecompanyreachedaPPAwithStatkraft(alsolocatedinMoiRana)forthesupplyof1.4TWhofhydropoweredenergyover2024-2031.FREYhighlightedthatthisrenewableenergywillbesuppliedatgloballycompetitiveterms.$0.32$0.35$0.30$0.25$0.20$0.05$0.00Costper$0.11$0.10$0.10$0.09$0.0814$0.14$0.20$0.20Median$0.40$0.25$0.07KWhSource:GoldmanSachsGlobalInvestmentResearch,cable.co.ukSource:Cable.co.uk,GoldmanSachsGlobalInvestmentResearchSecondly,NorwayofferssomeoftheleastcarbonintensiveenergyinEurope,supportingFREY’sambitiontoreachthelowestpossiblelife-cycleemissionswithitsbatteries.Asmentioned,FREYwillsource100%hydro-basedrenewablepowerfromStatkraftforGigaArctic.Althoughthismaynotdriveacompetitiveadvantagevspeerstoday,thiscouldprovemorebeneficialinthefutureoncebatterieswillbejudgedacrosstheirentirelifeemissions.TheEU’sproposed‘batterypassport’willincludedetailsonthecarbonfootprintofbatteriesandcouldincludethresholdsofmaximumemissionsatsomepointinthefuture.August12EstoniaPolandSerbiaGreeceBulgariaIrelandGermanyRomaniaItalyHungaryPortugalSpainDenmarkBelgiumCroatiaEstoniaPolandSerbiaGreeceBulgariaIrelandGermanyRomaniaItalyHungaryPortugalSpainDenmarkBelgiumCroatiaSlovakiaAustriaFinlandFranceSwitzerlandNorwaySwedenPolandChinaUSAGermanyUKItalyHungarySpainSlovakiaFinlandFranceNorwaySweden_800728700600541500400352300265200196100101025CarbonIntensitying/kWhMedian2233571696958Source:BPStatisticalReviewofWorldEnergy,EmberSource:BPStatisticalReviewofWorldEnergy,EmberAugust13__FREYaimstoproducetheworld’slowestCO2lifecycleemissionsbatteries,whichshouldbedrivenbyalocalizedvaluechainintheNordicregion.Overall,oncethelocalizationhasbeenachieved,FREYaimstoreduceCO2emissionsby>80%vspeers,althoughwenotethatthisincludesstepsthatmaybeseveralyearsawayduetoleadtimesandfinancingrequirements.Thisincludesproductionofcathodematerials(viaalicensingagreementwithAleees)inthefirstcathodeplantoutsideofChina.Previously,FREYwasplanningtodothisviaaJVwithAleees,butisnowplanningtopursuethisalone,whichmayrequirefurtherinvestmentinthefuture.Forthetimebeing,FREYwillpurchasematerialsfromestablishedAsiansuppliers.AlthoughwebelievecertainstepstoreachFREY’scarbontargetsmaybeseveralyearsaway,webelieveboththerenewableenergyaccessinNorwayandthereductioninmanufacturingstepsfrom24M’stechnologywillsupporttheproductionofmoresustainablebatteries.Wh81%COeReduction~25~1580~1555~10GlobalAverageFREYRCurrentActiveBuildingaPackagingFREYRTarget'netzero'FREYRmaterialNordicandcellproductionproductioninecosystemofrecyclingNorway/NordicsadditionalsupplySource:Companydata,GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearchAugust14__FREYhasemergedasoneoffewbatteryventureswithafocusonLFP(lithium-iron-phosphate)cathodes.LFPgainedpopularityoverthepast24months,bothdrivenbyEuropeanOEMs’decisiontouseLFPfortheirentry-levelBEVs,aswellasincreaseddemandforenergystoragewhereLFPismostsuitable.LFPbatteriesarecheaperthannickel-basedbatteries,lessinflammableanddegradeatalowerrate,makingthehighlyapplicableforenergystoragesolutions(ESS).ItcomesatnosurprisetousthatallofFREY’sofftakeagreementssofarhavebeenintheESSspace.OutsideofCATL’srecentplantannouncementforHungary(100GWh)andElevenEsinSerbia,therehavebeennootherLFPgigafactoryannouncementsonEuropeansoil.Sofar,LFPproductionwaslimitedtoChinaduetopatentsthataresettoexpireattheendofthisyear.Weexpect37%/24%oftheglobal/EuropeanbatterymarkettobeLFPbatteriesin2030.Weseeupsidetothesefigures,especiallyinEurope,shouldOEMsacceleratetheirplanstoutilizeLFP.TheA/Bcarsegmentrepresentsc.25%ofEUcarsales,whereweseeLFPwellpositionedtotakemajorshare.WealsoseeupsidefromincreasingdemandforLFPfromtherecentstandaloneITCintheUS.Up