Welcome to the FREYR Battery Q4 2022 Earnings Conference Call. My name is Nadia, and I'll be coordinating the call today. [Operator Instructions] I will now hand over to your host, Jeffrey Spittel, Vice President of Investor Relations to begin. Jeffrey, please go ahead.

Good morning, good afternoon and good evening. Welcome to FREYR Battery's fourth quarter and full year 2022 earnings conference call. With me today on the call are Tom-Einar Jensen, our Chief Executive Officer; Jan Arve Haugan, our Chief Operating Officer; Oscar Brown, our Chief Financial Officer; and Jeremy Bezdek, Executive Vice President of Corporate Development and President of FREYR Battery U.S. During today's call, management may make forward-looking statements about our business. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations. Most of these factors are outside FREYR's control and are difficult to predict. Additional information about risk factors that could materially affect our business are available in FREYR's S-1 and annual report on Form 10-K filed with the Securities and Exchange Commission, which are available on the Investor Relations section of our website. With that, I'll turn the call over to Tom.

Thank you, Jeff, and good morning, afternoon or evening, wherever you might be. Again, a true honor and pleasure for us to present this fourth quarter and full year 2022 earnings call for FREYR Battery. This is our seventh earnings call since we went public on the New York Stock Exchange on July 8, 2021. We will take you through all the notable updates since our last earnings call. I have to say that I'm amazed to see the company we have turned into since our humble beginnings back in 2018. The founders of the company had a dream of creating a sustainable battery solutions champion back then. Today, this dream is becoming a reality as we announce moving from a PowerPoint company to a real battery company. 2022 has cemented our position as one of the few real emerging battery companies in the Western Hemisphere. Building a battery company from scratch is not at all easy and we have lots of challenges ahead. Our industrial DNA, however, is based on a team with world-leading project execution and operational excellence skills which thrive in solving problems. We have combined this painstakingly detail-oriented approach with world leading battery experts and next-generation battery technology. Today, we are very proud to announce a fundamentally important next step in our journey of becoming a clean battery solutions provider and being an industrialization partner of choice in this exponentially booming battery industry. We now announce that we will open up our Customer Qualification Plant in Mo i Rana, Norway four weeks from today. All equipment will be installed on-site with robust testing completed and world-class preparations in place. This marks no less than the start of the gigawatt-hour scale era for the SemiSolid technology platform, a true breakthrough for the battery industry. We had erected…

Thanks a lot, Tom, and hello to everybody listening in on this earnings call. I'm now going to give you the latest update in our operations. So safety first. I'm glad that I can say that we have had yet another quarter without any reported serious incidents. However, we have reported three incidents with high potentials, all three of them related to lifting operations by subcontractors at the construction sites in Norway. The current workforce at the two locations in Mo is approximately 90 after a peak of 140 in December at the Customer Qualification Plant and close to 60 now at the construction site for Giga Arctic. As the workforce for construction is now growing, we expect close to 140 persons in March. More complex installations and work is elevated above ground. I find it also relevant here to remind everybody that it's a wider importance of safe job [indiscernible] discipline coordination. As of last week, the FREYR operations team is now managing the work permit system for all activities in the CQP. And currently, our operations group is now totaling almost 40 people in Mo. As we noted in our previous earnings call, we are progressing according to our schedules. But of course, we are not immune to the challenges that I noted previously, like for instance, logistics. We have still some COVID-19 restrictions and the scarcity of semiconductors. But I will also say that our teams are delivering very solid performance in recovering lost progress on critical sub projects, and as we speak, the final acceptance tests are being completed. Our project completion system is implemented and all deliveries into the CQP, and we are in detailed control of all the test results from the manufacturer site and any incomplete issue or modification fund that is needed…

Thank you, Jan Arve. Encouraging and professional, as always. Let me now remind and provide some updates to our audience around the 24M Technologies, SemiSolid platform. First of all, this is a platform in commercial production today, which was the key aspect for us when choosing to license it. The two other criteria when we selected it was that, it offered a step change in performance and cost and further improvement potential over time for the batteries we aim to produce. Secondly, it is a platform with world-leading companies from various industries and different geographical regions. I'm proud to say that we have deepened our discussions and fortified our working relationships with all of them. These companies include leaders in automotive production, ceramics and ultra-high speed [coating] (ph) based manufacturing complemented by deep supply chain knowledge and presence in localized energy markets from China, India, Southeast Asia, Europe, and the United States. In our ongoing due diligence process for Giga Arctic, we have again confirmed that the platform at the gigawatt hour scale will be at the absolute left-hand side of the cost curve. These analyses show that we are positioned to be up to 50% more cost effective than fourth quartile producers. Let me remind you that this is highly likely to occur in a market which will be deeply short battery products over the coming decade. Finally, let me underline the reasons for why this is possible and why we are optimistic that we will prevail. The cell design is a much larger electrode design which will structurally fit better with the ESS and EV configuration than current battery solutions going into the same. The process itself has dramatically simplified significantly reducing space, CapEx, energy, and labor consumption among other benefits. The initial products sent to our customers…

Thank you, Tom. First, I would like to express my excitement about joining the FREYR Battery team back beginning of January. I'm honored to work together with such an experienced and motivated team that is striving to provide low cost, high quality battery solutions for multiple end markets across the globe. As Tom alluded to earlier, we are at the point in time where we simply cannot ignore the need to accelerate our U.S. project. It makes sense to our customers, our supply chain partners and our investors. With the site selection process that took place over the last half of 2022, culminating in an attractive site in Coweta County, Georgia, the land acquisition in November was the key milestone for FREYR and the development of the U.S. project. Initially the US project was likely to lag the Giga Arctic project by 10 months to 12 months, but simply put, we cannot ignore the market opportunity that exists to accelerate the production capacity in the United States. To that end, our US team is taking a look at various options which would provide us the ability to move up our startup production from what was estimated to be in 2026 into the year 2025. We have multiple options that we are evaluating that will get us into production faster, while providing a fit for purpose product that the market desires. As we noted on Slide 7, the engineering and production line equipment is replicable from the Giga Arctic project into Giga America. We are focused on a project solution that we think will be enticing from an economic standpoint, not only for FREYR but for our partners that are looking to invest, as well as the ESS customer base in the United States that is in need of domestic cell…

Thank you, Jeremy. It is both a true pleasure and honor to have someone with your background and experience join our team. It also provides a ton of comfort and not least already massive progress globally with partners and in the U.S. for our accelerating development. Let me now turn to our view of the underlying dynamics of the energy markets and why this matters for us. And why it should matter to our investor community. At the most fundamental level, let me state the obvious, that solar and wind power generation has a marginal cost of zero and will therefore displace all other sources of energy when it is installed. This effect will only intensify as they grow larger and more importantly for a battery company trigger massive battery demand as batteries today are the most mature, best and cheapest solution to the intermittency problem. Batteries are now, as one example, even replacing peaker plants, and together with solar base load coal generation. Supply chain driven price inflation that we see today is furthermore temporary as we have seen in solar in the 2000s. Battery costs will soon converge back to its learning curve suggesting 15% plus cost decline for every doubling in installed capacity. Solar's learning curve has been quite consistent over the past 50 years, while batteries at gigawatt hour scale only have a couple of decades learning curve behind them. Current ESS all in cost are $300 to $500 per kilowatt hour with potential for large cost reduction across the system scope, halving on the ESS cost will for instance lead to much more than a doubling in total addressable market, due to market dynamics and economics. Our focus on integrating the SemiSolid platform also downstream, as alluded too by Jeremy, should therefore fundamentally provide us…

Thank you, Tom. So I'm on the financial update slide in the earnings deck, and I will review our financial results for the fourth quarter and the full year of 2022, as well as provide an update on our financing initiatives. For the quarter ended December 31, 2022, FREYR reported net income of $25 million or $0.20 per share compared with a net loss of $28 million for the same period last year. The net income for the company's most recent quarter was a result of a $60 million non-cash gain on our warrant liability fair value adjustment due to changes in our stock price from the end of the third quarter. For the full year 2022, the company reported a loss of $99 million or $0.83 per share compared with a loss of $93 million or $1.24 per share for 2021. As a reminder, the warrant liability fair value adjustment moves around period-to-period, based upon, among other things, the company's stock price at the end of each period, generally reporting gains on the stock declines as was the case in the fourth quarter and losses when the stock rises. For the full year 2022, this adjustment was a $14 million gain. More importantly for today is our cash investment rate. We spent net cash of $107 million in the fourth quarter compared with $70 million during the third quarter and $254 million for all of 2022. We ended the year with $563 million of cash, cash equivalents and restricted cash and no debt. Our cash burn rate and capital expenditures were almost completely offset by our successful follow-on equity offering in December that netted the company $251 million. As shown on the financial update slide in the earnings deck, naturally cash was spent on corporate overhead, operating expenses and…

Thank you, Oscar. What a year it has been and what a year we have in front of us. Let me then summarize with the following. FREYR is moving into live battery production and we are ready for the challenge. FREYR is accelerating our U.S. efforts to capture the opportunity with the U.S. technology, and global partners. FREYR is becoming a multi-project company from a geography, value chain and technology perspective. FREYR has deep interest from a large number of financial, industrial and strategic partners to support our growth. FREYR is, in short, on track to become a global champion in the clean battery solutions space. Finally, I would like to thank all our investors for your support and your patience. My main advice to you all is to stay long or should I say go longer. Let me finally remind you again of the upcoming event on March 28. The preface is over. Chapter one and the clean battery solutions history starts a month from today. Stay tuned for more. As the [indiscernible] excellently put it, we commit to deliver and we deliver on our commitments. With that, I hand it back to Jeffrey to guide us through the Q&A session.

Thanks, Tom. Operator, I think we're ready to open up the line for questions, please.

Thank you. [Operator Instructions] And our first question today go to Gabe Daoud of Cowen. Gabe. Please go ahead. Your line is open.

Thank you. Hi, everybody. Thanks for all the prepared remarks, really helpful. Tom, maybe if we could just start with CQP. Obviously getting pretty close here to first production, I guess, targeting 2Q 2023 for the real ramp. But just curious if you can maybe give us a little color around timing to really that gigawatt-hour scale that you're targeting. So how long do we or how long will it take to get to that certain level of production? And then maybe the follow-up to that would be what -- your customers, in order to convert the firm off-take from just conditional, how much volume do they really want to see? Do they want to see the CQP really get up to that gigawatt-hour level of scale? Just trying to get a sense of the timing around that.

Yes, good morning, Gabe. Thank you for that question. So, of course, the 28 of March is an important date for us when all equipment will be on site. We basically start operations of the CQP. As we have talked about previously, the customer qualification plant is an actual gigawatt hour scale facility, but we're not going to run it as a commercial facility. We're going to run it to test different solutions, to train our operators, to qualify new equipment, and to continuously improve the SemiSolid platform over time. In terms of volume of batteries that our customers require, so there are a couple of things there that are important to keep in mind. First of all, as we mentioned during the prepared remarks, we have already sent samples of batteries from 24M, especially to Nidec, which showed excellent characteristics and very strong performance. Our first objective, which is going to be key for the Nidec off-take agreements, which by the way is not conditional but firm, but we need to deliver batteries from the CQP that at least deliver as good performance as the batteries produced in 24M. The difference between the ones produced in 24M and the ones that we will produce is a larger form factor. But the chemistry, the cathode and anode material going into it will be the same. We don't require a huge amount of batteries per customer to qualify that. So, during the second quarter we will ramp up production and we will start to test these batteries with our customers, most likely on-site in Mo i Rana, but also at third party lab. So, during the second quarter of 2023, we should see a lot of progress in terms of both validating what we've already demonstrated with Nidec from batteries produced at 24M, now produced at the CQP in a gigawatt hour scale facility and with all the other off-take agreements we have, which will also then start testing the batteries produced from the facility in question. When all of that is done and this will always be a continuous journey not stopping in the second quarter, but going into the third and fourth quarter and first quarter of next year, we will also gradually increase the speed, increase the yield, increase the availability of the equipment and that is also another feature that is going to be important. So we need to be able to show that we can extrapolate performance from the CQP in to the Giga Arctic facility. The good news is that all of our customers have very aligned incentives with us and all of the 24M ecosystem and the ones that are relevant in this regard will be on site to support the scale up and the development.

Really helpful. Thanks, Tom. And then maybe I guess as a follow-up pivoting to Giga America. Can you maybe talk a little bit about the order of operations there? I guess maybe a bit of a chicken or egg scenario there as well. But -- so as far as strategic to potentially writing a check, do they want to see more from off-take, but then also from a customer standpoint, because they want clarity around timing of start-up, which I guess requires capital. So how do we think about Giga America? And how that could truly be accelerated alongside Giga Arctic?

Well, so I think we see a variety of different levels of interest, right? Some who are ready to step up to the plate and "take more risk" and some who would like to see more data and more sort of results coming out of the CQP. But I do think that the interest in participating in developing Giga America is a function of many things, it's not only a function of what we do in the CQP, it's a function of perspectives around the IRA. It's a function of actually having a viable business case which as Jeremy alluded to, we are working on various different options from, let's call it, brownfield type options to more fast-tracking first couple of production lines from a larger greenfield development. All of which we are in the coming weeks going to narrow down into a specific development plan. And in parallel with that, we are presenting these options to a number of these strategic industrial and financial partners, and I have to say the interest is very strong. So yes, you are right in the sense that this is somewhat of a chicken and egg problem, but I will say, it's much more of us deciding on how we want to go and then deciding on what partners to bring into that equation.

Understood. Thanks, Tom. Thanks, guys.

Thanks, Gabe.

Thank you. And the next question goes to Julien Dumoulin Smith of Bank of America. Julien, please go ahead. Your line is open.

Hey, guys. It's Alex Rabell on for Julien. I appreciate you guys taking the question. Just to follow on a little bit on the U.S. story here with Giga America. I'm curious if you guys have thought through it all sort of the ability to possibly monetize tax credits upfront as a source of capital? And also if we think about a fast track, you're talking 34 gigawatt hours, eight lines. I mean, is there an opportunity here just to do essentially like an equity based startup take the risk on balance sheet effectively and then try to branch into more strategic from there? Thanks.

Thanks for that question. I'm going to have Oscar chime in on this one. Oscar, can I hand it over to you to provide some color on monetization options and how we're thinking about different development solutions?

Yes, certainly. Thanks, Tom, and thanks, Alex. So yes, for sure, there is great opportunities to monetize these tax credits. And as you know with the IRA, a lot of the monetization options have been simplified relative to past laws. So we're looking forward to that. We've talked to several of the commercial banks in the U.S. and other investors on how to do this. So the key question will be, can we pull that, how far up can we pull that, how close to production and what volumes can we do to finance all of that, so that's sort of evolving in the market real time. But we do see an opportunity there. And just to remind you, we did some math on Slide 10 to give you a sense on how hugely impactful it is to the economics of sort of the giga scale production centers. So for sure, that's developing and we'll see, but we think that can happen. Tom, I will flip it back to you on just -- on how you want to address the sort of different options for Giga America?

Yes. So, maybe I'm going to hand that over to Jeremy, who is also on the call to talk a little bit in more nuance around the different options that we're looking into for a fast-track Giga America development. Jeremy?

Thanks, Tom, and thanks for the question. Yes, I mean, I will put it this way, the team, as I mentioned earlier in my remarks, is really on a sprint pace to figure out over the next four to six weeks the best options that we have in place. Tom mentioned a couple of those in his answer to the last question, which could involve maybe a couple of early initial lines that could move fast. We've got a couple of different options around the land that we have acquired that we're evaluating as well. And so, it's not overly defined yet, but it will be over the next four to six weeks as we narrow it on, quite frankly, bringing into production -- the start of production timeline from 2026, which we had talked about previously into 2025, the team is hard at work, and it's sort of -- this is a bit of we're announcing an acceleration approach and we'll be coming back with the actual plan here over the, like I said, in a very short period of time. So I wish I had more to describe at this point, but it's quite frankly, it's something that is evolving very rapidly with the team right now.

Let me just complement a bit. As part of that, Alex, we're also looking into the financing of these different options as well, which, of course, is a function of the partnership based discussions on strategic industrial and financial side up against whatever option we are evaluating. But I think you are sort of directionally quite astute when you're asking the question. We're obviously thinking in the same lines how fast can we get real production up and running and what is the kind of path of least resistance in that, it's clearly something we're evaluating. So stay tuned for more updates on this. The main message is, we're moving as fast as we can to capture the IRA benefits as quickly as we can. And now, that we're starting to produce batteries in the CQP we have a different kind of platform from which to accelerate.

Got it. And I appreciate the color here. Just on the Giga Arctic piece, I'm just, like I said a housekeeping point, when we look at the capital spend back out, I guess, the land spend for Georgia, it seems pretty similar to Q3. So, curious if that's sort of a ratable run rate you to think about here as far as what you're willing to allocate currently on Giga Arctic? And then, curious if you could expand a little bit of as far as this European IRA piece what do you think that might look like as far as a response and sort of what keeps you confident on the parallel investment method that you're sort of laying out here? Thanks.

So Oscar, I'm going to ask you to answer the first part of the question, and then I'll weigh in on the IRA or the localized IRA response in Europe.

Sure, yes. So it's not a bad run rate in the third -- in the fourth quarter. I think we'll be a little bit under that. In the first few quarters here, we made a lot of progress on the building and, of course, watching what's going to happen in response to the back half of this question in terms of Norway on the IRA might change your sort of view on how fast we could move and want to move on CapEx. But our plan is to sort of within any moment of our available cash to make sure we've got enough to cover some progress on all these projects. We have to finish out the CQP. Giga America going and then continued progress on Giga Arctic. And then, still have a run rate -- a runway of a couple of years of cash as a safety buffer for overall burn rate. So we're not giving out a specific guidance, but we're sort of in line with the board approvals that you've heard about from previous quarters. Tom?

Yes. When it comes to the localized IRA response, there is a broad variety of tools that are being discussed and investigated both at the European Union level, as well as at the national level. I think it's fair to say that the Norwegian Government will largely follow what the European Union will advise and that is an ongoing quite heated debate which sort of spans from, let's call it, CapEx related incentive mechanisms to accelerated depreciation solutions to production tax credit and direct grants, et cetera. So we are evaluating all of these and looking at and advising, let's call it, our counterpart in the Norwegian realm, so to speak, on what would work best for us relative to what we're seeing in the U.S. So it's too early to say exactly what it's going to be, but we are optimistic that it will be significant, and it will definitely improve significantly the economics of Giga Arctic so that it becomes closer to what we're seeing under the IRA. But to expect that you'll have a one-to-one response to the IRA is probably not something that we are too hopeful of. But that it will be material and dramatically improve the underlying profitability of what is already a reasonably profitable project is something that we're quite confident that will happen. But the jury is still out. We are deep into those processes with the relevant stakeholders, and we will be providing updates on this as and when they emerge.

Got it. Thanks, guys, congrats.

Thanks, Alex.

Thank you. And the next question goes to Philipp Koenig of Goldman Sachs. Philipp, please go ahead, your line is open.

Yes. Thank you very much for taking my question, and thank you for the presentation. My first question is just on the coming back to the pivot to moving faster in the U.S. I guess for how long are you willing to wait for European or Norwegian response to the IRA and how long are you going to continue to invest in the progress on both factories? And does that also sort of dependent on how quickly you can maybe get external capital in terms of progressing in the U.S. or how long are you willing to spend CapEx basically out of your own pocket? And then my second question is just sort of a bit on the commercial side. You referenced no potential discussions with OEMs for your LFP technology. We are clearly seeing a huge interest and uptake of LFP by lots of Western OEMs. I know you are initially targeting in so far in most of your off takes have been in the ESS space. But do you see passenger car OEMs now as a possibility for FREYR? Any color there would be very much appreciated. Thanks.

Thank you, Philipp. So, on how long I would -- so, this kind of a -- it depends, right? I mean, at the end of the day, we are currently comfortable to pursue both projects in parallel. As we are describing in the materials, we're continuing to develop Gig Arctic at a measured pace while being leads into conversations and processes to see what the localized incentives will end up being. We're talking about weeks and months here before we see clarity on this. And then we will evaluate what that potentially does again to the project finance process primarily because that's kind of the main elements in this. As we have alluded to before the project finance is a function of the performance of the CQP and to some extent the relative economics of a project in Norway relative to its similar project in America. So we will be measuring this and monitoring it closely and we will be carefully pushing forward both projects, and as again, we're optimistic that the responses will be material, and that they are happening in the near term. And then we'll come back to the market, as mentioned with the consequences of those actions, when we see them more clearly. So far the signals are reasonably optimistic, but let's see what happens when the European Union decides and how Norway sort of response to that. Good news is as mentioned also exemplified by announcing the National Norwegian Battery Strategy, when we announced Giga Arctic last year in June, you can imagine that we have reasonably strong access to the relevant decision makers when it comes to understanding how these incentives will be implemented. So that's on that piece. When it comes to the OEM interest and, just to be clear, we are aspiring…

Thank you. Maybe if I just ask one quick question on the CQP, it seems like Nidec sort of have -- first call on the first sales that come off the line, is that sort of fair to assume because you already have a firm agreement with them to sort of verify and validate the quality of the cells?

That is absolutely fair to assume.

Okay. Thank you.

Thanks Phillip.

Thank you. And the next question goes to Nili Eslah of Clarksons Securities. Nili, please go ahead, your line is open.

Hi, everyone. How -- certainly, I would like to continue on CQP, just any comments on, about financing. And as it says that the ramp-up -- the Southern ramp-up of production at CQP will get capitalize different large major milestones, but what part of the financing is just dependent on other will start or ramp up or could you provide guidance on that?

Yes, I'm going to ask --

Yes, this is Oscar maybe I'll start --

Yes.

So thank you for that. So yes, so the project financing is a key piece for Giga Arctic that has conditions precedent in the term sheet that we're negotiating that relates to many things but primarily, or in part, the CQP production, so getting it ramped up, testable batteries as we've talked about, an acceptance by our primary customer, in this case, Nidec. So that's a key timing item. In terms of -- and we've been in the market already with the market sounding and then, of course, working with our mandated lead arrangers and all our ECAs and other financiers on progressing the project. Formal syndication will be a judgment call based on sort of seeing some activity out of the CQP combined with whatever response we see out of the EU and Norway to sort of kind of complete the full financial picture. So that's the primary driver. It does impact other financing activities. People want to see something come out of the CQP and how it looks. But a lot of those discussions, particularly with strategics are already pretty deep and high on the technical side. So we don't anticipate huge timing implications around that until -- while we ramp up the CQP as long as it's going well. Sorry, Tom, you might want to add something?

No, I think that was an astute answer.

All right. Great. Thanks for that. And if I can follow-up on securing raw materials, I know you have two deals, but could you remind us of how far ahead of time, you have that for? And then beyond that point where do you see probably the largest bottlenecks besides the lithium? And how do you go on to securing those?

First of all the securing raw materials has gone out for quite a while, and as I've said in the call, we also had secured everything that is needed now for the startup and ramp up of the CQP and lots of material has already been delivered to Mo i Rana. So the next step is obviously to start committing to the volumes necessary for the Gigafactories. And as I also indicated, we are actually now approaching suppliers also for Giga America. And I think we have approached approximately 20 suppliers. Some of them actually located in the U.S. Criticalities as you commented yourself on lithium supply. And I think that's extremely important for us to continue to broaden our sourcing strategy on that one. We have different alternatives in addition to the one that we're developing ourselves as Tom indicated, we have, as you were probably remember, we have a license agreement with Aleees of Taiwan, and obviously we need to continue to expand on that one. And I'm not sure if it is correct to go into the details here, but yes, that's probably the most important one. And going from there, I think you will come back to that when we announce more commitments for raw materials.

I think as we have said before we are largely covered for the raw material needs in Giga Arctic up to 2028 and we're continuing to evaluate additional opportunities to both drive down cost further and to localize and decarbonized the production of its. Again this is not something that we will do on our own. We will do it in deep strategic collaboration with others tapping into the large demand for LFP solutions, but also other critical raw materials going into the production of batteries in a localized context. Remember, to secure battery production in Europe and in the United States, it's not only about battery cell manufacturing. It's also about the critical raw materials going into it. But in the early stages of the battery cell manufacturing ramp-up, you will need to rely on existing supply chain, which predominantly are in Asia. And as we gradually pivot from an Asian supply to a localized supply, we want to be a catalyst for that as well but not necessarily as the dominant owner in it but an off taker and a strategic partner to unlock a sustainable, decarbonized and localized supply.

Great. Thanks for taking our question.

Thanks, Nili.

Thank you. And the next question goes to Adam Jonas of Morgan Stanley. Adam, please go ahead, your line is open.

Thanks, everybody. Just the first one, if you could remind us what's the minimum reject rate that your partners would consider from the CQP, what would they consider a success in order to sign binding agreement that essentially a ramp?

So Adam, thank you for that question. So I think first and foremost, they need to see that the form factor that we are producing, the 56/10 form factor which basically is a 56/10 centimeter large electrode is actually performing in accordance with the electrochemical performance that's the example that came out of 24M, that we recreate that. We will have low yield and low uptime of the facility in the early days. As you know, this will gradually be moving towards our targeted overall equipment efficiency, which is a function of uptime and yield, and as long as we can show that there is progress in the movement on both yield and uptime that is from a Nidec compensation point of view good enough as long as we replicate the electrochemical properties of the initial samples. Then we have various activities and roadmap established which we have been very transparent on together with our customers. And as long as we are trending inside these roadmaps that is what should suffice at least from an Nidec point of view, and this will be the same approach that we will take also with our other customers. So expect that we will be reporting on yield and uptime on a regular basis over time, they will start off very low, we will have a lot of issues and problems. We have identified that as I mentioned previously, more than 1,500 potential sources of error and established standard operating procedures for all of them and probably we will have twice as many problems. So, but at least we have a good start in that. We're also working actively with the relevant stakeholders in the 24M ecosystem to support the ramp-up from an experience of SemiSolid production point of view, but also from a high-speed coating based manufacturing process point of view as well as working with Nidec to provide scaling expertise as they are deep into sort of scaling energy intensive processes in their own field. And many of these things are transferable to the challenges that we will face, but it's of course, a combination of electrochemistry plus mechanics plus many different things. But as long as we are trending in the right direction and as long as the electrochemical properties of the initial batteries that we produce with high reject rate are within the tolerances that we have previously demonstrated that will be good enough for Nidec.

Thanks, Tom. Oscar one for you, any precedence from your extensive project financing experience on monetizing the pull forward of tax credits or are we kind of an unchartered territory. I didn't know if there's anything in the oil and gas world that we think could compare to that?

Yes. Thanks, Adam. Yes, there's actually more in sort of solar and other sort of renewables is probably more comparable. And I think we have seen, in the past, typically, that financing comes in right around plant completion. So the trick here is -- and so it would be a development, I think, in this market. But given the ease of monetization, we're hopeful and optimistic that there may be an opportunity to pull that forward some from plant completion to a little bit ahead of that. And so that's kind of what Tom was alluding to. So at a minimum, we think around the time we completed a plant that you can monetize the forward production, especially if they're under contract, and so we'll have to balance that because we do think the merchant market is pretty great right now. But it would be -- it's my understanding is it would be a little bit of a development to pull that forward. But that might translate into how the banks are willing to commit to financing a little bit ahead of time. So there just may be some benefits. This is sort of evolving real-time as people improve their understanding of the IRA, which is quite good. And of course, we'll see what the treasury regs say to clarify anything, but it's pretty straightforward. So we'll see. But we've got a few months to sort of figure out with our counterparties how it might work.

Thanks a lot, Oscar. Thanks everybody.

Thanks Adam.

Thank you. And the next question goes to Maheep Mandloi of Credit Suisse. Maheep, please go ahead. Your line is open.

Hey, good morning [indiscernible]. Thanks for the questions here. Just on to the U.S. factory, you talked about accelerating the build out here, could you just talk about the timing as it like early 2025 or mid and as you kind of like, look at the module manufacturing also, could you remind us of the CapEx for module manufacturing is included in that initial estimate? Are you expecting any revision to the CapEx guidance?

Maheep, thank you for that question. As Jeremy alluded to, we are neck deep in evaluating the different scenarios and different options that we have in front of us, initial couple of production line, brownfield, greenfield, first step equity finance, project finance, different sort of partnership arrangements around it. So it's a little bit too early for us to be concrete as to sort of when we believe we can start up. So we say 2025 for now, and then we'll be more specific in terms of what that looks like when we have done the initial investigation. What also Jeremy alluded to was that we are, as part of that, also evaluating module and DC block kind of development because a number of our customer engagements in the U.S. don't necessarily only need battery cells, they actually want a final ESS product. This is obviously something that we are developing together with Nidec in Norway. And we're looking into various options as to how we can also play in the downstream area of that. As you know, the CapEx related to that relative to cell manufacturing on a per kilowatt hour basis is significantly less. But let us come back with more specific estimates on that when we've done the work in the next four to six weeks.

Got you. And then something more timely some news earlier today on China, potentially reducing supply -- lithium supply from one of its hubs in Yichun province. Just curious, like, how does that, like, global supply of lithium kind of impact your cost assumptions and how should we think about your pricing assumption? Then all -- I understand that you probably you don't have China exposure directly, but just curious in global lithium pricing, how does that get impacted because of all these challenges? Thanks.

Yes. So of course this is a big question and one that many in the battery industry are grappling with. But as you know, in our off take agreements, we have pass-through mechanisms for the most critical raw materials that are critical in defense that they are both have a market and also at the most volatile, and in that it's a spoke lithium hydroxide and lithium carbonate. So that price exposure is in large part to passed on to our customers. And that is obviously something that impacting the overall contractual negotiations of the pricing structure in the long-term off take agreements. Now, so that's kind of on the commercial side of things. We feel that we are hedging that volatility if you like quite significantly through how the contractual framework is being constructed. Now at the end of the day we are -- to a large extent people behind FREYR are upstream based people coming from raw material businesses. So we do fundamentally understand a little bit around how to secure profitability in the raw material based industry. So how to do that and in the most, let's call it profit accretive way for the company is embedded in what we label the industrialization partner of choice approach. We on the one hand will be a large off-taker of product or volume of lithium hydroxide, lithium carbonate, LFP material, anode material, copper foil and so on and so forth. And on the other hand, we see an opportunity to offer our experience in energy, energy intensive and process intensive industries and that combination is part of what is triggering a broad variety of stakeholders again multibillion dollar global companies to actually one thing to partner with FREYR not only from battery cell production point of view but also potentially upstream. And that is something that will play itself out both in Europe and in the United States over the coming months and years, essentially. So we are cognizant of the challenge. Clearly, we have a broad variety of partners that want to team up with us. We have secured raw materials contractually, as mentioned, to Giga Arctic up until 2028. We have about 20 processes ongoing now for broadening that out, including also looking into how to secure raw materials from the U.S. So all in all, I think we are in decent shape in this regard.

Got it. Really appreciate that. And I'll take the rest offline. Thank you.

Thanks, Maheep.

Thank you. And our final question today goes to Gregory Lewis of BTIG. Greg, please go ahead. Your line is open.

Hey, thank you very much, and good afternoon and good morning everybody. Tom, just realizing that the causal along, I'll just keep it to one question. I was hoping like realizing that the CQP live stream is going to be next month pretty exciting. Beyond that, is there any way we should kind of think about event path, timelines, hurdle rates for how we think kind of news flow, once the CQP is up as we kind of as basically 2023 moves forward?

Yes. Well, there's going to be a lot of events and news flow coming from FREYR in 2023, that's for sure. We are moving from, as I've said, being a "PowerPoint Company" to becoming a battery company with a headache and opportunities that come with that. I think the 28 of March is, of course an event where more color around what is in front of us will be presented including potential, more nuance around the partnership-based approach and how we're sort of faring and all of that. And then principally, you should expect us to of course report performance in the CQP. You should expect us to report on the electrochemical properties of the batteries we produce. You should expect us to report on the development and yield, and uptime and the facility. You should expect us to communicate around additional customer traction, which could also branch into mainstream EV and you should expect us to sort of a course report on progress on the financing side ESS project finance and or additional industrial strategic or financial partners on project level or otherwise as we might see appropriate. We will be sort of moving forward at pace as we have been doing and now we have a real asset, which will document to the world the degree of our ability to produce batteries, and we are well prepared for the challenge, but we don't expect it to be a smooth ride, but we expect it to be a very exciting year.

Okay. Great day. Thank you very much and have a great rest of the day.

Thanks, Greg.

Thank you, Greg.

Thank you. We have no further questions. I'll hand back to Jeffrey Spittel for any closing remarks.

Thanks, Nadia. Well, thank you all very much for your time and interest. Please don't hesitate to reach out to me with additional questions and we look forward to seeing a number of you in person or virtually on the road starting this week. That will conclude the call. Thanks again.