[Operator Instructions] FREYR Battery 's full year 2021 Earnings Call. [Operator's instructions] I'll now hand the call to Jeff Spittel, Vice President, and Investor Relations. Please begin.

Good morning. And welcome everyone to FREYR Battery 's Fourth-Quarter and full-year 2021 Earnings Conference Call. With me today on the call are Tom Jensen, our Chief Executive Officer, John Oliver Hogan, our Chief Operating 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 for 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 on our annual report on Form 10-K for fiscal year 2021 and other reports that we may file with the SEC. With that, I will turn the call over to Tom.

Good morning, good afternoon, and good evening, everyone. And thank you, Jeff, for this kind introduction. And welcome everyone to this Third Quarterly Reporting for FREYR and the fourth quarter report for 2021 and full-year results for 2021. Today, we will run through an update on the business. Our strategic roadmap and priorities, how we are progressing in establishing localized supply chains. Our operations are now turning into gear. We will talk about the market opportunity, which we feel is and see is ever expanding. We're making strong from our commercial progress across a number of customer verticals. We're also making good progress on financing the expansion of our clean battery solutions plans and will focus on the near-term priorities and have a question-and-answer session. Next slide, please. So we are now well advanced in building various operational foundation. The Customer Qualification Plant, our first giga-scale facility is on track for starting up production later this year. The Gigafactory development, which will rest upon the development we have in the CQP, the Customer Qualification Plant, we are now pleased to announce that we're combining Gigafactory 1 and 2 into one larger facility with eight production lines and an upsized nameplate capacity of 18 gigawatt hours. On a like-for-like basis, comparing to the similar chemistry in battery solutions we used in the business plan presented in February, this represents a 40% increase in nameplate capacity relative to earlier. This increase in capacity will allow us to increase the capital and operational efficiency over the past. We will be implementing a phased investment decision on the production lines to allow us to move, as quickly as possible forward. We anticipate to start and ramp up production during the first half of 2024. When we are ready to make the final investment decision,…

Thanks a lot, Tom. And good morning to everyone. Today, I am going to give you an update on our raw material supply, and then I'll also follow-up with a brief on the -- where we are on the Customer Qualification Plant, as well as our front-end engineering non-current definition of the Gigafactory development. First, the supply raw material. As everyone is aware of, the sourcing of raw materials to the battery industry is in core competence and certainly, equally important to building the plant and building the operational team. I want to take -- you to take note of the fact that our technology license partner, 24M, of the Cambridge, Boston, U.S. as a preapproved the key raw materials supplies as part of the license agreement. In FREYR, we have already now converted some of these, and as Tom said, 9 out of 13 into frame agreements that we can continue to work on. And as we also said, the progress of the four remaining are well a way, ready to be converted. As a direct follow-up of the commercial contracts for sales, we will now build the bill of material for the production program and establish a form of supply contracts to meet the build up -- our production buildup. We have today confirmed and secured volumes to be used during the factory acceptance test. And the first production from our full-scale production lines in the customer penetration count. As part of our strategy to facilitate and developed localized and decarbonized upstream supply systems, we have also agreed with -- to work with companies like Glencore and the Elise for different business structures that can be sourcing them materials out of the Nordic region. They maintained or had clear ambition to build the long-term value chain for battery…

Thank you very much, Jan Arve. Let's move to the next slide, please. Let's now turn to the market side of things. And as I've been alluding to many, many times before, we see a continuously growing and increasing market segment. In fact, we have now made an updated study, together with Rystad Energy, to look at what battery cell demand is required to meet various macroeconomic ambitions, keeping in line with climate ambitions that has been set by the world leaders. If you assume a 1.6-degree target and you measure that up against a realistic assessment of all announced production capacity additions into the market to date, we see that there is a very strong market short on the horizon. This does not mean that we necessarily are expecting a 9 terawatt-hour market annually by 2030, it is more a reflection of where the market needs to be if we are going to be in line with Paris Agreement and the like. But if that is indeed the case, as you see in broken down on this slide, and we look at all announced capacity and put a realistic roll-out assumption on all of these capacities, we actually are in a very strong market short environment. In fact, today it is already experiencing this, as also alluded to previously through our investors in many of our customer dialogues. A lot of the existing battery cell manufacturing capacity and supply is coming from China and Asia in general. And an increasing number of customers are now being put on hold or even canceled in terms of battery deliveries. So the case for localized de -carbonized battery cell manufacturing capacity, both in Europe and the United States, the two core focus areas of, is definitely a very strong value proposition in…

Thank you, Steffen. So let's move to the next slide and summarize the key strategic priorities of the company. Trade was built off around three core strategic tenants, around speed, scale and sustainability. And they are mutually reinforcing, and our progress depends upon filtering everything we do through these lenses. We are executing on our plan to establish 100 to 150 GWh of clean battery production in Europe and the U.S. by 2030. We are now as mentioned by Steffen, securing the capital required to finance the combined Gigafactory’s 1&2. This will complement our already strong cash position, which was unlocked through our IPO on the U.S. stock market last year. We're identifying additional capital solutions to facilitate plan giga-scale built out across Norway, U.S. and Finland, in addition to select participation up and downstream from battery cell manufacturing capacity to de -carbonize the supply of raw materials and localize the same, as well as unlocking additional customer segments and additional value capture. The localization and de - carbonization of the supply chains are well advancing. And we're very happy to see that we are making strong progress in a highly tight environment to secure frame agreements, allowing us to start a production of the Customer Qualification Plant and initial deliveries of the Gigafactory 1&2. We will keep expanding our initiatives to establish the Nordic battery belts -- or the Nordic battery belt, I should say, comprising the key raw material inputs going into battery cell manufacturing. That is cathode, anode, electrolyte, lithium, and different sources, and so on and so forth. We are now negotiating volumes and prices on raw material frame agreements and complementing that with additional efforts, to ensure that we have a cost competitive supply of the critical inputs needed for battery cell manufacturing across all…

Thank you. [Operator Instructions] Our first question comes from the line of Evan Silverberg at Morgan Stanley, please go ahead. Your line is open.

Hey, good morning, guys. Evan Silverberg on behalf of Adam Jonas. Understanding that there's not a formal guidance for CapEx and OPEX for 2022 yet. But how can we think about the range of outcomes there? Obviously, you guys are putting a lot of stuff in the ground, probably need to hire. Are we thinking it's magnitude tire? Just any color there.

Thank you, Evan, and good morning. And thank you for that question. As mentioned during the presentation, we are now firming up the basis for the Final Investment Decision for the combined Gigafactory 1 and 2. And when we have such basis, we will come back to the market with a detailed breakdown of the CapEx estimates, as well as the schedule of the frame. What I can say, is that we're still confident that the 24M technology offers material cost savings relative to conventional batteries and manufacturing capacity. I've said many times before, anyone with a screen, and who is participating in the market space, will of course be well-advised that there is inflationary pressure on, may I say, all cost components and aspects that go into this development. So you should expect a general increase, of course, in the CapEx estimate for proprietary facilities, but they will still be roughly 50% cheaper than what conventional capacity will be subjected to in this time frame. What is an important point to note is we have a very experienced project execution team that have entered into these collaborative approaches with various suppliers across the supply chain of the materials and, more importantly, the manufacturing equipment that we need? So we're doing everything we can to mitigate any potential cost increases. But as I said, part of the benefit of having the 24M technology with a dramatic reduction in number of production steps relative to conventional capacity. And therefore, a dramatically shrunk footprint of the battery manufacturing capacity does allow for lower than conventional costs than CapEx estimates, and as stated, we'll come back with specific estimates on essential program.

That's helpful. Thank you. Just one follow-up. Yes, I understand coming back after FID but can we assume that the cash consumption rates prior to FID will be similar to what we saw in the fourth quarter? And then, what is the timeline for FID to make sure that you're still on track for first half of '24?

So yes, you can assume that cash burn will be roughly in line with fourth quarter. Of course, we are taking early commitments in early works to ensure that we are on track for starting up the first half of 2024. So that is well underway. We do believe that we will have the sufficient bankable propositions in place during this half of 2022 to allow us to make initial investment decisions which will communicate to the market later this spring and early summer. So we are on track to start up capacity in Gigafactory 1 and 2 in the first half of 2024, and we will make investment decisions correspondingly to ensure that we can reach that time-frame.

Thank you very much.

Thank you. Our next question comes from the line of Maheep Mandloi of Credit Suisse. Please go ahead. Your line is open.

Hey, good morning. Can you guys hear me?

Yes, we can. Steffen Føreid: You're coming through.

Loud and clear.

Thanks, guys. Just first just on the FID, I mean, in slide you talked about the phase FID. Could you just talk more about that? I mean, did you said it's straying at least some are in good position. But what can we expect? And as part of that, do you have to wait for conversion of those customer contracts in the firm contracts or you conduct a different track all together? Thanks.

Yes. So practically speaking, Maheep, right? We will be installing these production lines in a sequenced order. So we're not able to, nor is it industrially sensible to implement all of them at the same time. So as mentioned, there will be eight production lines, similar in size to the production line we are now on track to stocking up on the Customer Qualification Plant. Of course, all the learnings that we're having from the CQP, as we call it, will be implemented in this spaced approach. So every other month, we will be installing a new production line, and then ramping that up to full capacity. So that's what it gives you a little bit of a sense of what the ramp of chase will be like. A big part of the reasoning behind investing in the Customer Qualification Plant, that an actual industrial scale facility, is to minimize the ramp-up time and to get rapidly up to high yield and high uptime in the facility. When it comes to the phased FID approach, we obviously want to ensure that we have an optimized capital structure. And the offtake agreements or, of course, core components in unlocking bankable project finance structures, which are well imbalanced in pursuing with the international and local banks, supported deeply by the Norwegian Export/Credit Agency through export-oriented guarantees to ground and other aspects. When we make this first FID, we will, obviously, complement that with announcing the final financing structure around it. But as we gradually then build up capacity, more and more financing will be attracted into the facility, or into the company, I should say. And we're well advanced in doing that so that we can be on track to stocking up this facility in the first half of 2024.

Got it. And just on the start of the assumption that you'll ramp up in the second half of '24. And I think some of the supply contracts starting '24, right? Could you just talk about the cadence of the supply contracts through -- from '24 to '28 or 2030? How should we think about that as the supply ramps up?

Raw material supply will -- as we have alluded to previously -- will gradually go from an existing supplier base, all the approved or pre -approved suppliers of the transplant technology and the 24M or the frame agreements that we have announced, the 9 out of 13 that is already signed and the remaining four, which will be filed in short order, allow us to have initial volumes coming into the Customer Qualification Plant, as well as Gigafactory 1&2. Then we are complementing that approach with a localized joint venture type approach where the lease partnership we announced some weeks ago is one example of how we aim to capitalize a localized and decarbonized supply of materials. In addition to this, we obviously also in process with a number of other suppliers from lithium hydroxide to lithium carbonate, to various anode, natural and synthetic providers, as well as capital providers, not only LFP, but also NMC as we be ahead of the curve in terms of what our customers would want. We do see a very strong movements towards the LFP segment, which also sort of limits the burden of some of the nickel and manganese supply into the capital side of things whereas iron and phosphate, it's a "simpler and easier raw material process to cover. " So all-in-all, all of this is done in sync with the roll-out of capacity. We are well-advanced in ensuring that the initial volumes that we will be producing in our first facilities are already secured. And we'll continue to complement that with an increasing localization and decarbonization footprint, so that we can also capture the cost advantages of low-cost renewable energy and the decarbonization advantages of the same over time. This we will do with world-leading, well-established companies to see the benefit of establishing production of key input factors into battery cell manufacturing in the Nordic region. And we have a broad variety of processes and structures ongoing in that regard, so quite confident that the raw material supply side as well captured the way it looks now. But there is a lot of new battery cell manufacturing capacity that needs to come on stream. So as we've said many times, we need to be very active in this space to ensure that we have sufficient traction on kit critical input factors into battery cell manufacturing, but so far so good.

Thanks for that, I understand the supply side. And then just the last one from me, then I'll get back in the queue. And could you just talk a little bit with commodity inflation, like we definitely seeing lithium component and other raw materials here, and then we'll see what happens with that, as you did do this. A lot of demand for batteries coming up. So how does that feature into your discussions with their supplies? Thanks.

So clearly, this is filtering through -- not only through raw material pricing assumptions, but also to the offered battery itself in the marketplace today. So as many battery prices for battery cells in 2021 and in 2022, and possibly beyond, is probably set to increase due to the increase in raw material prices. Now for, we will implement half through mechanisms in our agreements with our customers, so that's a relevant fraction of our exposure to raw material prices are shared and pass-through to our customers. They are already seeing price hikes, so 20% to 25% in current battery cell supply from Asian providers, and this is in large part driven by the inflationary pressure on the raw materials provided. Now, from a profitability point of view, given the pass-through mechanisms that we're implementing in our sales agreements, and the fact that we are taking equity positions in joint venture structures with a localization de - carbonization strategy, we are increasingly confident that the margin picture in the company remains robust. But we are in a situation where temporary, quite significant, inflationary pressures are being experienced across the board, in the raw material space. Again, you have to get a very late in the morning not to be be aware of this, but we get up early in the morning and we're ahead of that problem. And we have good solutions to it, both from a commercial, as well as the security point of view.

Got it. Thanks for taking the questions, guys.

Thank you. Our next question comes from the line of Fredrik Stene of Clarkson Platou Securities. Please go ahead, your line is open.

Hey, Tom and team and congratulations on the quarter here. I have two questions for you today and I think the first one relates to just FID in general for not only what's happening in Norway, but also what's happening in the U.S. and the camp of Finland. You come to a point first 70% approximately the first strong dealer factories in Norway have been covered by overtake agreements. And I was wondering, in your ongoing discussions for more overtake agreements, do you have a threshold that you need to see being put in place before you'll go ahead with FID s elsewhere? Obviously, there's a bankable angle to do this, but is there a ballpark? What we'd need to see before we can be quite certain that it's fair to assume these other factories going ahead this time, as well?

Thank you for those questions. And good morning, or good afternoon. When it comes to our thinking around this, what we have communicated earlier, is that we need to see at least 50% of the capacity to be installed committed for at least 3 years, before we will contemplate adding capacity and making investment decisions against it. This is a threshold that we have been discussing with project finance advisors and banks, and seems to be resonating at a relevant threshold. In particular, in the current market environment. What we've also stated previously, is that in a very strong market short environment, ideally you don't want to necessarily tie-up too much of your capacity in long-term structures. The flip-side of that, of course, is that we are still a very young company. We're implementing a gigawatt-hour scale, a recently nascent technology. And therefore, we would tend to want to cover more of the capacity in the early stages of that roll-out than what we would gradually over time, potentially need to do, when we do these iterative processes with the project finance providers. But generally speaking, you should expect that we are on track to make the full Investment Decision for Gigafactory 1 and 2 in Norway later this year, you should expect us to make investment decisions in the U.S. later this year and we are also working hard to potentially make investment decisions also for capacity in Finland towards the end of this year, our ambition is still to produce or to have in production 43 gigawatt-hours of battery cells in 2025 and 83 gigawatt-hours sales in 2028, going to the a 100,150 gigawatt hours into 2030 time frame. And we will probably have more of the initial capacity covered by long-term offtake contracts in the early stages…

That's like a super helpful. I'd follow-up on that and I guess, BTIG in line with teams from from the previous questions as well. You mentioned that the margin that you're generating, you're protecting that by having some sort or at least the way I understood it some sort of making a please on your raw material supply. But that can be passed on to your end customers. And I was wondering just in kind of over the last 12 months in your initial offtake discussions, have you experienced any changing willingness among those participants to get that costs, extra costs thrown at them just because they haven't really limited older alternatives to secure the battery top?

Well, so without going into too much detail, reality prevails, right? And reality shows that one, there is a limited supply of batteries. The ongoing decarbonization of the transportation sector means that increasing number of electric vehicle producers are, in a way, taking off most if not all of the available capacity in the market. Which then means that energy storage providers, commercial vehicle providers, and other companies that have increasing demand for batteries are subjected to securing self-supply elsewhere. They are also being informed by their existing suppliers if they're already having long-term relationships with Asian and or Chinese providers those prices are going significantly up as a result of the raw material price increase. So when we are then discussing our commercial relationships, there is no surprise nor any sort of negative reaction to the need to have a balanced approach in passing through some of those costs. Typically, we pass through most of the costs that have market references so that it's easy for us to sort of monitor how the prices are moving. And then, our profitability become in large part a function of both, our participation upstream on the supply side, but also on our conversion cost focus. And in that context, having the most effective and capital efficient technology that 24M represents, does allow us to drive down conversion costs relative to conventional production quite significantly. And the combination of a localized low material strategy with a superior conversion costs technology, if I may, gives us a very strong opportunity to pass through part of the cost increases that we're seeing, but also offer lower costs and prices to our customers, relative to what they're subjected to from conventional technology. I actually, think we are in a situation where capturing additional market share is unfolding in front of our eyes. And we're very excited about the reactions that we're seeing in the market.

Thanks, guys, this is super helpful. I'll pass it on. Bye.

Thank you. And our next question comes from the line of Saad Patel, at JPMorgan, please go ahead. Your line is open.

Hi, this is Todd on for José Assumed with J.P. Morgan. I have a few questions. The first one is on Slide number 11, you've given the big down between the different kinds of agreements. Can you just talk a little bit about the contracts or the discussions you are having with automakers currently? And you can also remind us, how do you think about profitability and the business opportunities on auto versus ESS? Considering your initial two contracts have been on the ESS side. I can ask my second question later. Thank you.

Yes. So thank you. So we will of course, on a running basis when we have converted these processes into firm agreements, announce them to the market and there are some of the largest O2 - IMS in -- that's left behind and any of these discussions. And I think a core part of what is driving their interest is one, the need to have a localized battery cell capacity. They depend too much on nation supply today and therefore there is deep willingness across that they're say almost all European and U.S. automakers to create structures whereby localized production of capacity is unlocked, so to speak. Now, we are done talking to and negotiating with the larger players, as well as more new commerce into this space, and I think at the heart of the discussion is really what can the technology deliver in terms of technical characteristics of the product itself. And then, the fact that Volkswagen invested into 24M and took up the license of that technology towards the end of last year, has clearly increased the interest, not only from the dialogues we had at the time, but also increased the interest in partnering with FREYR for cell manufacturing for, let's call it the vehicle space, right? Commercial and passenger vehicles. And across those segments, there are different, of course, segments in it from the ultra high energy density fast charge solutions, to more overnight charge and lower-cost sort of segments, which then stipulates what capital chemistry and sort of anode chemistry you want to put into the equation. So there's a broad variety of different demand segments that are firming up and with a flexible production platform that is chemistry agnostic, meaning that we can principally produce both NMC and LFP and other capital chemistries into the same production platform. We have a deep opportunity to create, again, tailor-made and custom-made sort of solutions for our customers. Again, I think the profitability aspects of our client relationships or customer relationships is a function of the pass-through mechanisms on raw materials and our conversion efficiency. We generally see that the 24M Technology offers both bill of material cost savings as well as conversion costs savings relative to conventional capacity. And we'll then balance that against the need for large volume commitments. But as mentioned, we do see that demand is much higher than supply in the foreseeable future. So again, we're going to optimize for value and ensure that we have margins in the products that we sell that are in line with or even maybe above what we have indicated to the market earlier. So yes, there are a number of automakers and commercial vehicle producers behind the funnel. And we will be announcing them when we have struck the relevant agreements. And these agreements will be struck based on a balanced approach of ensuring that we optimize for value for the capacity that we built.

My second question is more on the lines of FID coming into the picture now. Do you have any utilized payments and go to 24M then use FID or any sort of milestones with trail?

So our deep licensing and services agreements with 24M has no limitation only in terms of where we are now targeting to establish production capacity. As we have mentioned before, this is an evergreen production license that we can establish capacity anywhere in the world, with temporary restrictions in Japan and Southeast Asia, given the licenses with Kyocera and GPSC in Japan and Thailand respectively. But those restrictions lapse at the end of this year. So after that, we could, if we wanted to, establish production capacity in Asia as well. Not that we necessarily have ambitions to do so. To answer your question, there is no need for us to go back to 24M to ask for anything or to pay anything specifically, when we are establishing new production capacity in the areas we are now moving forwards -- towards FID. And then, as we start producing and selling to our customers, there will be a running royalty-based fee that run -- goes to 24M, and that royalty fee is declining over time as volume increases.

Mostly, and for -- just one final question. So can you just remind us that the plants that they're willing to -- they're trying to set up, what does the financing structure on that you've -- looking at 25% equities and you have 75% debt structure on them?

So we will come back to the market with the details of the final financing structure for the space that might be development. But as you can imagine, we are pursuing project finance-based structures for its coupled wave ground, and equity already raised into those facilities that we're also looking into as the CFO mentioned on the call, various bombed black structures to essentially ensure that we have enough low cost of capital into the initial facilities of possible. We see an increasing interest across the board, across all financing classes into this, and we will be making detailed breakdown, solve that financing structure when we are announcing the FID, sometime later this year.

Okay. Thank you so much.

Thank you. Our next question comes from the line of Greg Lewis at BTIG. Please go ahead, your line is open.

Thank you. And good afternoon and good morning, everybody. Realizing where we're running a little long here. I'll just ask one. Tom. Clearly, you're having lots of conversations around the supply chain. It's definitely a major issue facing the battery cell supply for probably the next couple of decades. We're advising that we can see spot pricing that is high. I think that being said, that's not a huge flaw of the market. So as we think about building your portfolio of supply contracts for raw materials, do you have any sense or targets how you're thinking about securing spot versus fixed pricing as you build out your portfolio of key raw material supplies?

Good morning, Greg, and thanks for that question. Yes, we are, of course, thinking about these things. I think, we generally see the raw material as a critical strategic component of being a battery producer. And that is why we have consistently been saying, that a localized and de -carbonized supply chain of all critical inputs into battery cell manufacturing, with participation in that capacity over time, is going to be important for us. In the initial supply, through the same agreements and additional agreements with providers, we will be having a mix of long-term arrangements and possible flexibility around more spot space pricing. But we will try to limit that, of course, as much as possible, given what we're seeing in the market today. I think, you should see, and think about FREYR over time, as being deeply present in the upstream part of the value chain. Because that is going to be core to ensure over time, that you have not only the lowest potential cost of the biggest cost component of producing batteries, but also the most de -carbonized, let's call it supply into the and just to underline and many of you already know this, of course, energy is one of the biggest cost tractors in processing these different metals into process battery materials. And that is why the interest in partnering with the likes of in the Nordic region is very high because still on a relative basis, energy process in this area is very competitive relative to anywhere else in the world. And of course, on top of that you get all the savings from logistics by actually processing this in the vicinity of where the battery cell manufacturing capacity is being established. Finally, there is of course also quite a loft of the actual raw materials present in the Nordic region and many places in the U.S. where we are now progressing towards, selection activities and well advanced been high-grading, except those different locations in the U.S. where access to raw materials and over time also, taking those raw materials and processing them close to our facilities is going to be part of the footprint that we have established. So it's not a one-size-fits-all or one simple answer to that question, and I don't think you were expecting that either, but we will be sort of doing a mix of things to ensure that one, we have the actual material we require to produce the volumes that our customers require. And two, actually then be able to provide that volume to the customers they need to be on board with commercial structures that allow us to mitigate the risks that those price increases on more spot-based spaces would entail. And all of that is now being discussed and being negotiated in a various sort of forward-looking and positive environment, I should say, irrespective of the deep challenge that we're seeing in the marketplace around us.

Perfect. Thank you for the color, Tom.

Thank you. We currently have one further question in the queue, so just to remind to our participants, [Operator Instructions]. And the next question is from the line of Kenneth Steveson of Sperry Securities. Please go ahead. Your line is open.

Hi, team. Congratulations with the '21 results. On the 24M Technology, could you give us some internal experience from other partner in the process of ramping up production there?

Thank you, Kenneth Steveson. The 24M Technology, as we have talked about previously, part of the reason why we selected it, was we were looking for 3 things in our technology strategy. We were looking for commercial introduced technology. One that'll prospect change in performance and cost. And one that could really show further improvements down the line, as you take it to gigawatt hour scale. So FREYR is the first to take it to gigawatt hour production, and the first licensee in Europe. And we have an increasing and strong relationship with all the other licensees of the 24M Technology. We've visited some of them, seen their facilities and actually, as also mentioned by Jan Arve in our presentation, we're implementing part of the learnings that they have seen, when they are implementing their facilities into our manufacturing footprint. But Kyocera was the first one to take initial commercial volumes into the market and they started pilot production in 2019 and have gradually been increasing capacity in Japan, because of domestic energy storage market. So it's still reasonably early. But all the learning's that we can leverage, whether it is from 24M itself or from our licensing brothers and sisters will be of course, investigated and for in the roll-out of our own capacity. At the same time, we are identifying and implementing efforts to ensure that we can have an outside availability, where uptime and production as possible, while leveraging the CQP to ensure that we can ramp up capacity and yield as quickly as possible in a precommercial facility as the CQP would represent. And therefore, leveraging those learnings when we have this modularized rollout of our production lines in Gigafactory 1 and 2 and beyond.

Thank you. Just a follow-up on the CO2 footprint we see in other base materials, such as aluminum, steel, and iron, that the green metal will gradually attract the premium. Any thoughts on how this could play out in that respect?

Well, so yes, we have a number -- a lot of thoughts around this, right? And we want to be the leader in this space by absolute greenest battery on the life cycle basis that is offered into the marketplace. Our initial ambition of 80% reduction in CO2 footprint along the value chain has been articulated the sort of value that could represent relative to our production footprint is indicated in this presentation. So we should think about the current DTS prices in Europe and assume that they are representative of a value retribution to that CO2 reduction. You can see a plus minus $6 per kilowatt hour savings if you like, and or value that is generating from the lower CO2 footprint. And now from our perspective, given what is out today from the IPCC on the sort of impacts of climate change, all of this will just create more momentum around firmer carbon prices, carbon tariffs, carbon decarbonization efforts. But exactly how those feel to footprint reductions will manifest itself along the value chain, is still somewhat on tier. But of course, if we're thinking about $0.5 billion in value at an 83 gigawatt-hour capacity to be shared in some way, between where you are participating in the value chain. The upside is obviously quite significant. And this sort of what we have been saying all along, that if batteries are meant to be the core capitalist for decarbonizing transportation and energy systems globally, they themselves need to be decarbonized. And we are now seeing an increasing financial end return, sort of impetus, around that as well. And we will obviously be guiding and updating the market on where we're seeing that moving as we are progressing through the 80% production and beyond. Over time, we do believe that having more and more decarbonized battery cell manufacturing capacity and better and better battery solutions will enable the harder to abate parts of that value chain to also decarbonize. And with the localized and decarbonized raw material supply chain into the same. It's just impossible to envisage an earlier net-zero ambition across that entire supply chain. And with our earlier estimates of around 80 kilograms of CO2 per kilowatt-hour battery produced. It's just basic math, that sort of allows you to indicate what the value of that sort of becomes. And we believe it's significant and it has to be significant to ensure that we can speed up and accelerate a broader roll-out of decarbonized battery cell solutions.

Thank you. As there are no further questions in the queue, I'll hand it back to for the closing comments.

Thank you, Mark. And thank you everybody for your interest. We’re looking forward to catching up with you on the road, or virtually, this quarter. We will talk to you soon and please don't hesitate to follow-up if you have other questions today, or later this week. Thanks, and take care.