FREYR Battery CEO Tom Jensen joins Yahoo Finance Live to discuss the company’s planned Giga manufacturing facilities, the energy transition, and the outlook for storing renewable energy.

Video Transcript

THOMAS INGENLATH: 2017, when we were first time here launching the brand, there was definitely not that big wave of electrification. It changed totally over the course of '18 and '19. And then clearly we saw in '19 that we have to accelerate and make US much more of a bigger topic for us as a company.

- That was Polestar's CEO earlier this morning in our studio weighing in on the ramp-up of electrification in the US. Let's continue the renewable energy conversation with battery maker FREYR, specifically talking about the demand picture for EVs and plans for a big US project in Georgia. Let's bring in the CEO, Tom Jensen.

Tom, it's always good to talk to you. You have been in full expansion mode. Feels like really things have accelerated since the Inflation Reduction Act. Talk to me about these new plans in Georgia. And why specifically that state?

TOM JENSEN: So, Akiko, well, first of all, thank you for having us on board. It's, obviously, very good to be back. And I also had the pleasure of visiting the Great state of Georgia last week, where we announced that we've selected Coweta County as the location for Giga America, as we call it.

So the process has been ongoing for nine months or so, maybe a little bit longer. We looked initially at more than 130 sites in more than 25 states. And we selected Coweta County in Georgia for a number of reasons.

So one, it's the access to talent. It's a great location from an access to talent point of view. It's all about people, in the end, how good you will be in producing facilities. Two, it's logistics and infrastructure, great location in that regard, and also, of course, energy availability in the area and also opportunity to build dedicated renewable energy for these facilities.

So we secured 368 hectares of prime industrial land, with an option to extend. That is 15 times larger than the facility we have in Norway. So we have an opportunity to not only build 34 gigawatt hours of phase one production facility, which is a $1.7 billion plan, but we aim to build at least $2.6 billion worth of facilities, including upstream and downstream developments to further improve the economics, reduce the carbon footprint, employ more than 720 people, and all of this we announced last week.

And just a final note, maybe, we are going to implement the US-based technology 24M, which offers step change in performance and cost-- lower footprint, lower capital expenditures, lower energy consumption, and maybe triple the amount of batteries produced per employee. All of that we're doing in Georgia. And we're super happy to be there and super happy to take our footprint, so to speak, established in Norway, also in the US.

- Yeah, Tom, Georgia one of those states that has really been successful in attracting some of these big EV-related projects because of the incentives in place at the state level. But since then, obviously, we have the Inflation Reduction Act. There's federal incentives in place now. To what extent has that changed or shifted your ambitions in the US?

TOM JENSEN: Well, I think it's clearly accelerated our ambitions, right, because at the end of the day, the Inflation Reduction Act is meant to reduce energy inflation in part and to then produce low cost renewable solutions enabled by low-cost battery solutions to basically put more solar energy and wind energy into the system, which is in large part what we are going to do, in addition to providing batteries for mobility. So clearly, the Inflation Reduction Act is an example for the rest of the world to follow if we want to accelerate the, let's call it, energy transition.

So kudos to the administration for doing that. It will definitely speed up the development of battery solutions in the US. And it is actually also creating additional momentum in other regions around the world. So the US is setting an example in terms of how to speed up the energy transition. So clearly important for us.

- On that front, there are those reports that you are in talks with private equity firm KKR to raise additional funds to be able to support some of those ambitions. What can you tell us about where those talks stand right now?

TOM JENSEN: So, I mean, we don't comment on market rumors. So that's kind of the answer number one. But generally speaking, we are looking at various ways in which to sort of ensure the capital formation over the cycle. Most important focus for us right now is the project finance process, which is a three-step process. And we're sort of in the midst of the second phase of it.

That's going really well. The interest in participating in building facilities of this kind, both in Norway and in the United States, is quite strong from strategic, industrial, and financial players. So we'll be sort of inviting in a whole range of different parties into this over time. And when we have something meaningful to communicate to the market we will, of course, come back to the market and communicate it. But the interest to participate in building clean battery solutions up and downstream from cell manufacturing, which is our initial focus, is very strong and is continuing to strengthen also in part because of the Inflation Reduction Act.

- Tom, something we've talked about before is really trying to clean out the supply chain, as in making sure that that's green as well, so the end product is fully green. When you're able to localize the manufacturing the way that you're planning to with this factory, and how does that get you closer to that goal? I think you told me that you want to get to 80% before. Is that right?

TOM JENSEN: So our initial ambition is to have an 80% reduction in the footprint of the battery cell on a life cycle basis. And what that means is that you need renewable energy to power your battery cell manufacturing facility. You also need renewable energy to power the main feedstock going into those batteries.

And that's why we have also taken steps to move into cathode manufacturing production, the largest cost component of a battery cell, but also the part that has the largest carbon footprint, and basically by using renewable energy also in the processing of metals and minerals to cathodes and anodes and electrolyte and all of these different things that go into a battery, you will gradually sort of decarbonize. Our ultimate ambition, Akiko, is to go to zero, and not even net zero, but absolute zero, which means that you need to have solutions for the harder-to-abate parts of that supply chain.

Good news is this becomes a virtuous circle. So you actually start to get more and more momentum as more and more machinery and equipment, et cetera, is electrified. And as you then start to produce batteries also with renewable energy and the cost of batteries keep coming down, more and more will take to these solutions.

So it's inevitable that it will happen in our opinion. The question is, how fast? And again, the Inflation Reduction Act is definitely putting an accelerant on that. And we're super happy about it.

- Really quickly, Tom, what does the demand picture look like going into next year? I mean, it feels like we have seen an acceleration in EV adoption. Do you anticipate that to continue, despite where gas prices move?

TOM JENSEN: I absolutely can. It's not a question of whether the entire automotive sector will become electrified. It's only a question of time. There are now 500 different models that are being rolled out and offered, all of them, or not all of them, but many of them much better than the combustion engine counterparts.

But also in the energy storage space, which is a core part of the equation here, because not only do you need to decarbonize the vehicles and remove the tailpipe-- that's one part of the equation, but you also need to decarbonize the system that charge these vehicles. And that is as big of a task. And batteries play and as big of a role in that. So both need to happen. And we see demand picking up in an accelerating way on both fronts.

- OK, good to hear that. Tom Jensen, FREYR CEO, always good to have you on the show. Appreciate the time.