On August 30, 2022 (Japan Standard Time), Nidec Corporation (“Nidec”) (TSE: 6594; OTC US: NJDCY) signed a joint venture agreement with FREYR BATTERY SA (“FREYR”) (NYSE: FREY), a Norwegian semi-solid lithium-ion battery manufacturer.
1. Purpose of the agreement
FREYR is a lithium-ion battery manufacturer founded in 2018, listed on the New York Stock Exchange in 2021, and planning to start mass production in 2024. FREYR has innovative semi-solid lithium-ion battery manufacturing technology in terms of quality and manufacturing process. The company will manufacture batteries in Norway, an advanced decarbonization country, exclusively using clean renewable hydroelectric power locally available. Consequently, FREYR’s production of battery cell is environmentally friendly, and it gains competitive advantage in terms of abundant energy supply and lower cost coupled with lower CO2 emissions.
Nidec’s Battery Energy Storage Solutions (“BESS”) provide services to the grid that enable accelerated adoption of renewable power generation which contributes to the realization of a carbon-zero society. FREYR will manufacture eco-friendly semi-solid lithium-ion batteries using 100% renewable energy through a dedicated Power Purchase Agreement with Statkraft (Europe’s largest renewable energy producer) based on 100% hydroelectric power. Our partnership with FREYR will ensure a stable procurement of competitive and clean semi-solid lithium-ion batteries for Nidec’s BESS solutions. This will help reduce CO2 emissions significantly throughout the entire process from the battery manufacturing process to the use of our BESS solution by our customers.
The objective of the alliance is to jointly create a global leading provider of utility scale battery energy storage products drawing on FREYR’s innovative, low-carbon battery technology and Nidec’s leading position in utility scale energy storage systems. By concluding this joint venture agreement, Nidec will strengthen strategic partnership with FREYR and aim to further expand the BESS solution business in the future.
In parallel, Nidec continues to work on strengthening its partnerships with leading lithium-ion battery suppliers in order to secure our needs for battery products and support our growth in the coming years.
2. Establish a leading position in the field of BESS and secure long-term growth
The BESS market, which offers more effective usage of renewable energy sources, is becoming increasingly important in the efforts toward realizing a decarbonized society. Nidec is one of the leading technology solution providers in the global BESS market with 1.3 GW of BESS installed at 121 energy storage projects in 21 countries globally including Europe, South America, and Africa. In March 2022, Nidec got an order of 129.8 MW BESS in Scotland, UK. Nidec expects strong growth for its BESS business and plans to increase its presence in EMEA and expand into North America and China.
FREYR is currently building its first Gigafactory in Norway, which is planned to start production from 2024 and reach a nameplate capacity of 29 GWh. FREYR is targeting more than 200 GWh installed annual production by 2030. FREYR’s semi-solid lithium-ion battery offers unique safety features compared to conventional lithium-ion battery, and is highly durable, attracting attention from various companies as next-generation batteries. The government of Norway has positioned FREYR as an essential company for its national battery strategy.
Through this strategic alliance, Nidec will provide innovative storage battery and power management technologies to the world, thereby contributing to the promotion of renewable energy and the realization of a decarbonized society. Nidec has set the medium-term strategic goal, Vision 2025, and targets carbon neutrality by 2040. In particular, Nidec will contribute to decarbonization by using its products and reduce CO2 emissions from business activities. This agreement will contribute to both. Nidec will continue to contribute to the realization of a carbon-neutral society through proactive investment in environmental measures.
3. Joint Venture Outline
|Company Name||To be determined|
|Founded||Between October and December, 2022 (Plan)|
|Business||Development, manufacturing, and sales of battery products|
|CEO||Dominique Llonch [TBD]|
|Shareholder||Nidec 66.7%, FREYR 33.3%|
4. FREYR Business Outline (www.freyrbattery.com)
|Company Name||FREYR BATTERY SA|
|Listed Market||New York Stock Exchange (listed in 2021 under the ticker symbol FREY)|
|CEO||Tom Einar Jensen|
|Production Location||Mo i Rana, Norway (under construction, start of operation planned in 2024)|
|Business||Manufacture and sale of lithium-ion battery cells|
5. Effect on Financial Performance for the Current Fiscal Year
The Agreement is expected to have no significant impact on the Company’s consolidated financial performance for the fiscal year ending March 31, 2023. If necessary, the Company will make additional disclosure on a timely basis in accordance with the rules of the Tokyo Stock Exchange upon determination of further details.
Cautionary Statement Concerning Forward-Looking Information
This press release contains forward-looking statements regarding the intent, belief, strategy, plans or expectations of the Nidec Group or other parties. Such forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors, including, but not limited to, the risks to successfully integrating the acquired business with the Nidec Group, the anticipated benefits of the planned transaction not being realized, changes in general economic conditions, shifts in technology or user preferences for particular technologies, whether and when required regulatory approvals are obtained, other risks relating to the successful consummation of the planned transaction, and changes in business and regulatory environments. The Nidec Group does not undertake any obligation to update the forward-looking statements contained herein or the reasons why actual results could differ from those projected in the forward-looking statements except as may be required by law.