Why Morgan Stanley Is Bullish On Battery Pure-Play FREYR

FREYR Battery SA FREY has a unique combination of geographic and technological advantages to commercialize renewable batteries at scale, according to Morgan Stanley.

The FREYR Analyst: Morgan Stanley analyst Adam Jonas has rated the stock “Overweight” and assigned a 12-month price target of $18 a share.

The FREYR Thesis: Jonas noted that FREYR is seeing a pickup in end-market demand for battery electric vehicles and is in various stages of negotiations that represents more than 150 GWh of cumulative demand.

The company is also in various stages of talks with an additional 85 prospective customers. 

FREYR, which clean and low-cost batteries, has indicated it aims to finalize conditional offtake agreements with multiple customers between November 2021 and March 2022.

See Also: FREYR Forms JV With Koch Strategic Platforms For Clean Battery Cell Manufacturing

As per Jonas, the value proposition within FREYR is its combination of geography — Norway has a penetration of over 50% for electric vehicles and 98% for renewable energy.

“This combination, including making 24M semi-solid cell technology under licence, makes FREYR more de-risked vis-a-vis most other battery startups coming to market,” Jonas said.

“The key question is does this company have the capability to build the plant and ramp it efficaciously. While there are many risks, we believe they can execute. Success in Norway can pilot further industrialization on a global scale.”

Why It Matters: FREYR plans to develop up to 43 GWh of battery cell production capacity by 2025 with an ambition of up to 83 GWh in total capacity by 2028 to position the company as one of Europe’s largest battery cell suppliers. 

Five of the facilities are planned to be in the Mo i Rana industrial complex in Northern Norway.

Price Action: FREYR shares closed 3.55% higher at $13.72 a share on Wednesday.

Photo: Courtesy of Freyr Battery