T1 Energy Inc.

Hello and welcome to Friar Q3 2021 Earnings Release and Conference Call. Throughout the call, all participants will be in listening-only mode, and afterwards there will be a question-and-answer session. Today, I am pleased to present our first speaker, Vice President of Investor Relations, Jeffrey Spittel. Please begin your meeting.

Good day, and welcome everyone to Friar Valerie's Third Quarter Earnings Conference Call. With me today on the call are Tom Jensen, our Chief Executive Officer, and Stephan Foride, 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 of 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 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 in our quarterly report on Form 10-Q for the quarter ended September 30th, 2021, and other reports that we may file with the FCC. With that, I'll turn the call over to Tom.

Thank you, Jeff, and good morning, good afternoon, and good evening, wherever you might be dialing in from. It's a pleasure, of course, for me to be having this second earnings call for our third quarter earnings. and to give you important updates on the progress of our business. And to just sort of skip through to the most important part, we are experiencing tremendous commercial momentum in the rollout of clean battery solutions worldwide. And I'm very happy to be speaking to you today to give you more insight into all the hard work that the passionate and dedicated people at Freyr have been working on since the last earnings call. Today is making a significant progress towards our commercialization efforts. We are making commercial and strategic progress across the board. We're building out the operational foundation to deliver an increasing number of battery cells into an exponentially booming market. And we're developing and financing our expansions to scale to basically ensure that we can be relevant for the customers in time. So we are today announcing that we're negotiating offtake agreements in excess of 150 gigawatt hours in cumulative volumes between 2023 and 2030. This will start deliveries already in 2023 and increase on an annualized basis leading up to 2030. In addition to this, we have a broad and expanding pipeline of opportunities across all market segments, and I'll go into depth around our progress on the customer front. Earlier this year, in October, we announced the joint venture that we have established with Koch Strategic Platforms. We're progressing in the development of that joint venture, and we'll get back to how we are thinking about expanding capacity expansion to build into this exponentially growing customer base. We are also then accelerating our capacity expansion also in Finland, which we announced in the last earnings call, and both of these, coupled with our progress in Norway, gave us a strong and diversified production base to deliver world-leading battery cell solutions. We are on track with the development of our customer qualification plant and we're on schedule for starting that up in the second half of next year. We're also very pleased today to announce that we have entered into a supply agreement with Glencore for initial cobalt needs all the way through to 2028. We will then be making the concept selection, or we have made the concept selection, I should say, for our first commercial facility with a targeted startup in the second half of 2023, and we're now combining the development of Gigafactory 1 and 2, as has been alluded to in previous calls. We are accelerating the debt-based financing solutions to support the final investment decision on that joint development, and we're going to make that final investment decision During the first half of 2022, being on track for startup production in the second half of 2023, as we previously communicated to the market. Let me then go into the overview of our commercial progress. So we are basically seeing that the market short environment accelerating rate. That gives us an opportunity, generally speaking, to high-grade the customer portfolio as we are preoccupied with driving value of the batteries that we produce as opposed to just producing volumes for volume's sake. And if I then take you through the funnel of opportunities that we have in the making, we are today announcing that we have two conditional off-take agreements in advanced stages of negotiations. These two are globally leading companies in the ESS space and in the energy space in general. and the total demand between 2023 and 2030 from these two customers alone exceeds 50 GWh of potential demand. On top of this, we have seven off-take agreement negotiations ongoing, which in total adds an additional 100 GWh of demand potential in the same period on top of the 50 GWh that we now have in final stages of negotiation. We also have a top 25 prospective customer list. and these customers are increasing their demand projections with us every time we speak to them and we are now in technical review with all of them all under NDA and the total needs for these customers on aggregate add up to more than three terawatt hours of cumulative demand between 2024 and 2030. We don't anticipate of course to be able to deliver all of that anticipated demand but we are increasingly certain that we will be a relevant supplier On top of all of these developments, we have more than 60 prospective customers in addition, many of which are now also under NDA and starting technical review. They are European and US-based, predominantly companies, but also select Asian companies that are coming into the US and European markets across the EV segment, the ESS segment, and the mobility segment. Being a provider of clean battery solutions with a diversified production footprint across Norway, Finland, and the United States with a world-leading technology in 24M is providing a lot of interest in what we are delivering, and we're very happy today to be announcing that we've made substantial traction on the commercialization of our offering. So, developing a sustainable supply chain is core to having a low-cost, decarbonized supply of clean battery solutions. And we're therefore extremely proud to be announcing the cobalt agreements that we've entered into with Glencore. We've contracted up to 1,500 metric tons of sustainably sourced cobalt metal cup cathodes. These will be produced at Glencore's Nickel Lake facility in Norway. We have a joint ambition to reach 100% decarbonization of cobalt and other Thank you very much. Thank you very much. or Rhodes to commercialization started, of course, when we had the honor and privilege of listing on the New York Stock Exchange on July 8th this year. And quite a lot has happened since, and it's not that long ago since we actually became known to the battery industry from a listed on the New York Stock Exchange perspective. Since then, Koch Strategic Platforms and Fayed have announced the formation of our joint venture, and we've also announced that we're investing into 24M Technologies Adding additional exclusivity protection around the technology for deployment in the US. We have now made the concept selection, what we refer to internally as Decision Gate 2, for our first commercial Gigafactory. And that is now a combination of what we previously labeled Gigafactory 1 and 2. We're developing that now in one goal with increased throughput capacity relative to what we stated earlier. We will then continue to add off-stake agreements to the ones that we are indicating today so that we fill up capacity in our Gigafactory 1 and 2 and also add capacity to further capacity expansions. The visibility we have on off-stake today makes us sold out on the first Gigafactory 1 and 2 up until 2030, which then triggers us to accelerate development of additional capacity expansions We are making the final investment decision on Gigafactory 1 and 2 sometime in the first half of this year. We're optimizing that facility still. We've made the concept selection and we're still on track to start that up with commercial production of batteries in the second half of 2023. So, growth in the US. announced earlier this year an initial ambition of establishing up to 50 gigawatt hours of annualized capacity in the United States clean battery solutions together with Koch Strategic Platforms. This joint venture leverages the existing relationship with key potential U.S.-based customers and obviously gives us access to one of the largest private enterprises in the U.S. and their very strong presence across the energy space with logistics, energy competence, building large facilities, and at least their presence in and connections with core customers and different partners along the value chain for developing large scale battery solutions in the US. We have together with Koch Strategic Platforms aligned strategically with 24M Technologies, the technology platform that we will be using to build batteries across all market segments, not only Thank you very much. As also mentioned earlier this year, we have entered into initial agreements with the Finnish Minerals Group as well as the City of Vaasa. We have 90 hectares of prime development acreage just outside the City of Vaasa, which we're now going to accelerate in terms of developing viable value proposition and business concepts to expand capacity also in the Finnish region. This marries up very well with access to localized and regionalized raw materials, which there is plentiful of in the Finnish region, in addition to a broad variety of other critical input factors for battery cell production in Norway and Sweden. We are very excited about having an additional footprint in the Nordic region, and that will be another area where we can expand capacity, again, feeding into an exponentially growing customer base. So we are on schedule for the customer qualification plant. And as you can see on this picture, the beauty of the 24M technology is that we can establish capacity inside existing manufacturing facilities or inside buildings. This is a 13,000 square meter building which we secured earlier this year and we're on track to install Norway's first large-scale lithium-ion battery production facility which will be an actual industrial-scale production line of the 24M technology. All the critical path equipment is scheduled for delivery in the first half of 2022, and we're on track for combining all of those pieces together and starting up production of the 24M-based batteries in the second half of 2022. As also mentioned, based on the learnings and the insights that we're getting through the customer qualification plan development, we have now decided to combine the development of Gigafactory 1 and 2 into one larger development. We have an 18,000 square meter plot a little bit north of where this building is located and we are targeting to build out at least eight production lines of the similar sized equipment that we're installing into the custom qualification plant. In our communication to investors earlier, we believe that Gigafactory 1 and 2 would have a combined capacity of 13 gigawatt hours in actual throughput production annually. We now see based on the knowledge we have on the production facilities that we are increasing that throughput capacity quite substantially over and above the 13 gigawatt hours that we have mentioned before. We're proceeding, We have made the concept selection earlier this or last week and we are really excited about moving forward towards the final investment decision of Norway's first commercial gigafactory of double-digit gigawatt-hour output. Now, on the raw material supply, I've already mentioned the agreement with Glencore, which Beyond securing a critically important input through the 1,500 tons of cobalt also points direction to collaborating with Glencore on other metals and metal sulfates, etc., that we need to go into our production. But in addition to this, we have already secured five out of the 13 inputs we require to the customer qualification plant through our partner, Itochu, and the sub-suppliers that are already approved suppliers into the 24M The remaining eight is well advanced, and we are on track to ensure that we have sufficient and relevant qualified material to produce the initial batteries in the customer qualification plant. We will be speeding up and accelerating our efforts to localize and regionalize battery cell supply, or battery cell raw material supply, I should say, into our gigafactories. and the Glencore announcement is one important step in that regard, but we will now be gradually also announcing to the market additional partnerships to basically ensure that we have localized and regionalized and qualified raw materials going into our commercial facilities. We're also well advanced in examining downstream integration. Both modules and PAC partnerships are now in advanced stages of negotiation and discussion. And we will also be adding a module facility coupled with our cell manufacturing facility in Gigafactory 1 and 2. So in all, we are expanding our presence up and downstream from the cell manufacturing footprint, and we're seeing that the attractiveness of Freyja as a partner being both a customer and supplier of clean battery solutions and clean battery raw materials into cell production is something that is resonating with all of the major players in this space. So let me then just remind our investors about why we are so excited about the 24M technology. So the 24M technology, as all now have come to realize, is an MIT spin-off More than 12 years in the making and have fundamentally revolutionized not only how the battery cells are designed but also more importantly how they are produced. The innovative design provides us with an opportunity to build thicker electrodes which will dramatically reduce material costs and also allow us to put more energy carrying material into the same volumetric unit of final battery solution. It is highly flexible and can be deployed at multiple different scales across not only the ESS market and commercial mobility markets, but also in the EV market applications. We are very excited about the developments of the technology pertaining to the EV space, and we see increasing interest and attention from the large automotive OEMs around the 24M technology. It's also mentioned before, this is a chemistry agnostic or chemistry flexible platform that can feed into the existing supply chains. So we can produce NMC batteries, LFP batteries, any known chemistry being used in conventional lithium ion battery cell production today, while also offering a bridge into future metal anode solutions or solid state solutions over time. The really important innovation in this production platform is that it fundamentally reduces the footprint and the complexity of producing lithium-ion battery cells. We're going from 15 to 5 production steps, and with that dramatic reduction in footprint, which is more than an 80% reduction in footprint, 50% reduction in capex, substantial reduction in energy consumption and labor cost consumption, provides us not only with an opportunity to provide more cost-effective solutions to our customers, but it allows us to optimize the production of batteries further as we move into the future where still improved energy densities, improved cycle time, improved charge rates and at least reduced costs will be a requirement to basically deliver into the energy transition that is upon us. Finally, this is a more sustainable solution as we will have limited waste in the production if at all anything and the ability to recycle any of the production waste we have is dramatically better than that of conventional production. And since we are not using solvents and binders, but we're using the electrolyte as the solvent and the binder, we basically have a much less chemically sort of, let's call it, challenged final product, which also allows for ultimate recycling to be done in a much better way. So we are very happy with our relationship with 24M. This is a step into the future. It offers step change performance and cost improvements relative to conventional production. And we are very excited about this technology and very excited about being the company to take it to multiple gigawatt hour scale in Europe and the United States. Let me now hand it over to our CFO to take you through the third quarter earnings financial aspects before I conclude with some concluding remarks. Stefan?

Thank you, John, and good day, everyone. It's a pleasure to be here today. At the end of the third quarter, Frere had 623 million in cash and cash equivalents on its balance sheets. This is up substantially from the previous quarter, mainly due to the 644 million net proceeds received from the business combination with Alusa Energy in July. The increase is partly offset by an operating cash outflow, Our main financial priority short term is to minimize the use of cash while we build the organization and secure customer offtake. We recruit selectively and manage external costs closely and expect the fourth quarter SG&A expense to be roughly in line with the third quarter. Our financial priority is to secure funding solutions that supports the final investment decision for Gigafactory 1 and 2. The plan is to raise financing in the debt capital markets or among commercial banks and export credit agencies. We have engaged banks and have constructive dialogues with several potential lenders. As we accelerate our efforts to secure financing for the first commercial plant, we will seek a flexible, cost-efficient, and sustainably linked financing solution, allowing for speed in execution and supporting our timeline. Longer term, we will seek to diversify sources of funding and optimize our capital structure as we execute on the strategy. And on that note, I'll turn the call over to Tom for closing remarks.

Tom? Thank you Stefan. So to summarize and sort of take you through our current priorities. We are on track to establish 83 gigawatt hours of annualized capacity of clean battery cell solutions by 2028. We can now deploy opportunities not only in Norway, which were well advanced in developing, but also in Finland and the United States. And we will be looking into acceleration options for We see very strong customer traction building and we are very pleased today to announce initial insights into our customer funnel, which now already have nine customer engagements in offtake agreement discussions, two of which are in very advanced stages. In combination, these Nine agreements add up to more capacity that we are developing in Gigafactory 1 and 2. We will keep adding momentum to that across the ESS and commercial mobility segments and also expand into the EV market as we're moving towards the final investment decision for Gigafactory 1 and 2 in Norway. It's important for us to diversify our production footprint, and this is also something that our customers are valuing greatly. To have localized production footprint gives opportunity to have security of supply in local markets, which is going to be increasingly important for many of the large companies that we are in dialogue with across the ESS, commercial mobility and EV spectrum. Finally, we are extremely preoccupied with driving capital efficiency. And as our CFO alluded to, we will be pursuing sustainably linked financing options and also have a diversified capital base over time. We will optimize plant configurations and supply chains to generate strong returns. Having a localized and decarbonized supply chain is fundamentally important to drive down costs, but also to drive down the CO2 footprint on the lifecycle basis of the batteries we produce, which ultimately is going to be core to the decarbonization of transportation and energy systems globally Thank you for your attention. Thank you. If you do wish to ask a question,

Please press 01 on your telephone keypad. If you wish to withdraw your question, you may do so by pressing 02 to cancel. There will be a brief pause while questions are being registered. Our first question comes from Evan Silverberg with Morgan Stanley. Please go ahead.

Hi, all. Evan Zillberg on behalf of Adam Chionis. I'm curious if you guys could give some commentary on global supply chains and what you guys are seeing. Obviously, it's been the headlines a lot lately. I'm curious if there's any risk to that two-half, 22 start for the customer qualification plan and then Geek of Factories 1 and 2. Thanks.

Thank you, Evan. Great to hear your voice again. So, very astute question, of course. I'm not surprised that you're posing it. So, as I tried to allude to in the presentation, we will be having 13 different suppliers into our customer qualification plant, and all the volumes that we require are secured for five of them. and we are in closing stages with the remaining eight. So we don't see any risk of any supply shortage of materials going into the customer qualification plant, which as you know, is scheduled to come on stream in the second half of next year. Now, truth be told, that is a smaller volumetric requirements of raw materials. And when we moved to Giza factory one and two, Thank you very much. In advanced stages with multiple different parties on the cathode active material side, anode active material side, electrolytes, copper foil, lithium hydroxide, lithium carbonate, anything and everything we need for LFP batteries and NMC batteries for a localized production footprint over time. So, so far we are confident that we're going to be able to either scale up existing suppliers that are approved into the Sventebrand process and or combining that with localized developments, be it with existing cathode or anode material providers that are already present in the European realm and many more. and other stakeholders to ensure that tiny and sufficient raw material capacity is added in time for the battery cells to come online.

That's great. Thank you. One more follow-up, if you don't mind. You know, specifically within the United States, labor's been a big topic lately. Can you give... A little commentary on how the hiring has been going and, you know, any overall color on the Norwegian labor market right now.

So, thank you for that. So, clearly, competence is going to be critical for any business that is scaling as rapidly as ours. Now, today we've been in this peculiar, or not peculiar, but special situation that, you know, we were, in all earnest, a very startup company at the beginning of the year. We're still a startup company, but we've Thank you very much. Thank you very much. leading up to concept selection and ultimate final investment decision for the first gigafactory development for the joint venture in the US sometime next year. And we are, of course, leveraging the Koch Strategic Platforms and Koch network as much as we can. But we will obviously also now, and have started the outreach to various different locations and jurisdictions where we are investigating the potential establishment of capacity and so far the interest in what we're doing is very strong. But we do not underestimate the challenge of attracting the appropriate level of competence nor do we underestimate the need for us to also educate let's call it operators from other industries. But so far so good I would say, Evan. But this is a topic that you should pay attention to because we are paying attention to it and we will not underestimate the challenge.

Thank you very much.

Our next question comes from Greg Lewis with VTIG. Please go ahead.

Greg?

If your phone is on mute, please take that off so you can ask your question. We will move on to the next question for now. That is from Mahib Madloi from Credit Suisse. Please go ahead.

Hey, good day. Can you guys hear me?

We can.

Perfect. Thanks for the good questions and congratulations on all the updates here. Maybe if we can just start on the customers over here. Thanks for the clarification on the two in the ESS and the energy industry. Can you just talk about the other seven in early stages which end markets do they serve and how do you think about kind of the customer or their customer qualification process, their supply qualification process timelines? Thanks.

Yeah, so great. So let me generally speak about the nine, right? Two of them are more advanced and they are in the ESS realm. But among the nine, there is both ESS and commercial mobility customers. And it's both LFP, well, predominantly LFP batteries, but also NMC-based batteries. So that's why we're also excited about the Cobalt agreement with Glencore.

So... So generally speaking, the process is as is with conventional batteries.

You go through the ABCD cycle. We already have the opportunity to provide, of course, data from the 24M process, but also sample cells, not only from 24M, but also from select sister or brother licensees that we have in Asia. and we've also strengthened our relationships with them. And then as the customer qualification class comes online, we will obviously go further into the ABCD SOP kind of qualification process with batteries produced on site. So the general nature of the qualification process in the EFS space and in the commercial mobility space is generally shorter and quicker than that of the automotive space, even though there are initiatives ongoing in the EV space as well. to try to shorten the timelines of the qualification processes. And that is done through a combination of materials, but also through advanced, let's call it algorithmic data modeling and sort of early monitoring of cycle life and performance metrics on the cells that they come out of production. And so the final thing I'd like to say about that is I think it's fair to assume that the Time4M production platform is a faster production platform, which allows us to iterate Thank you very much. Thank you very much. This also pertains to the EV industry. So we're quite excited about the development and looking forward to keeping our investors and, of course, the broader constituency updates about progress on the customer side as we move towards the end of the year.

That's great, Natascha. Thanks for the clarification. And if I may just move on to the GIGA 1 and GIGA 2. Can you just talk about what's driving that higher throughput? It's interesting to talk about more than 13 gigawatts. Can you quantify how much that is and what's driving it? And just also understand the traffic needs for the two GIGA factories combined now.

Yeah, so we are moving towards the final investment decision. and we will be making the final investment decision in the first half of next year or sooner rather than later but we need to go through a number of different steps to ensure that we can optimize both the total cost of it in a let's call it inflationary environment so we're trying to sort of avoid of course the worst impacts of that but anyone with a Reuters screen obviously realize that we have been through a fairly hectic inflationary time and now certain of the input factors and costs that go into it for us are starting to normalize so we're trying to optimize for the cost structure there so we're not going to go out with any updated capex numbers at this time but when it comes to the configuration itself and we have made the concept selection so obviously we have been learning quite a lot from the customer qualification plan development and the design phase, if you like, of the casting unit cell assembly machine, which is the heart of the transplant process. And let's call it relevant upstream and downstream developments that go with that. That has allowed us also to, in iterative dialogues with our customers, which we've been quite clear on in previous conversations with our investors, that this is an iterative process where we come with this new lithium ion battery solution that's staying in the existing Rian offering the opportunity to build larger electrodes and better electrodes with more energy carrying material in it. So that has then allowed us to optimize the size of the cells that we intend to produce. And that increase in size of cells coupled with the increased speed that we think we can implement in the TransferM technology allows us to increase throughput of the combined facility. In addition to this, we are adding a modular facility. So we're building modules to pack around the cells, which is increasingly important for many of our ESS customers. That module facility is a CapEx Lite facility, I mean, relative to the battery cell facilities, but adds roughly 30% in revenue on top of the cell revenue that we will get from the cells. and that you know improves the margin picture for the totality of the equation so when it comes to the exact throughput capacity that we're going to come that's going to come out of it and we're not ready yet to sort of quantify that specifically but it is in the double digit percent increase for sure uh how much up we're going to end up at is still a matter of optimization so we'll come back to the market when we have more precision around that which will be we will be announcing leading up to and and uh concluding with the final investment decision again in the first half of next year.

Got it. That's helpful. And just one last one from me on the cash usage in the near term. For Q4, should we expect the same 30 million range for cash burn as well and similar run date until the gigafactories start on a quarterly basis?

Yeah, so generally speaking, as our CFO alluded to in the call, we will roughly have the same SG&A burn in the fourth quarter as we have in the third quarter. But maybe, Stefan, you want to add some color to this so the CFO can comment additionally on this. Stefan?

Yes, I can do that. Thank you. So that's correct. Approximately the same G&A in the fourth quarter. But I would just like to make the point that in the 30, that includes about As a reminder, if you do wish to ask a question, please press 01 on your telephone keypad.

Our next question comes from Jakob Green with BTIG. Please go ahead.

Hey, guys. Sorry, Greg was having some technical issues, but just a quick one for me. So looking at your offtake agreements and your prospective offtake agreements for 150 gigawatt hours, is there any way to think about the cumulative demand over a time period? Any way to think about that?

Yeah, so just to be clear, the 150 gigawatt hours is a cumulative demand from these nine customer engagements between 2023 and 2030. And by 2030, or leading up to 2030, I should say, the total demand actually exceeds The capacity that we aim to produce from Gigafactory 1 and 2 as we see it today. And when we couple that with the accelerating momentum that we're seeing from the top 25 customer list, that triggers us to develop more Gigafactories as soon as we can in Norway, Finland and the United States. The market short as we have been talking about for quite some time, maybe in particular in the ESS and commercial mobility space, is increasingly being manifested. and our customers are increasingly worried or preoccupied with securing supply as quickly as they can, also from localized sources of production. So that is a very good situation, of course, from a battery cell producers point of view. But it also underpins or underscores the challenge that the battery industry will have moving forward that a market short environment, while positive for many aspects, does underpin the fact that shortage of batteries can be a function of shortage of raw materials, etc., as also alluded to in previous questions. So we will now accelerate across the board. We have had this value chain approach all along. That is now bearing fruits, I should say, both in terms of partnerships establishment upstream from cell production but also when we're branching out into module and pack partnerships and module production as well with our Gigafactory 1 and 2 development, that is increasing the opportunity to sort of develop tailor-made solutions to a larger extent for our customers. And the final thing, having the opportunity to diversify geographically and getting closer to the customers but also having a diversified supply base So hopefully that sort of gives some more color to that. We will be coming back to the market with more specifics around Gigafactory 1 and 2 and obviously subsequent Gigafactories in Norway, in Finland and the US when we have some more definition around that. and that again will be, as it has been to date, iterative processes between ourselves and our customers, our raw material providers, as well as potential developments of conventional technology in joint venture constructs in the Nordic region, maybe predominantly. And there is a very strong interest from Thank you very much. and we are increasingly being regarded as a credible provider of solutions. and we are getting stronger and stronger by the day. So you should expect more in that area also from Tallinn moving forward, but right now we are excited about the traction we have around Gigafactory 1 and 2 and the commercial ramifications of that, the 150 gigawatt hours that we have under, let's say, advanced and final stages of negotiations as we speak, again, more than filled up that capacity until 2030. So then we will be complementing that to then trigger development of new capacity.

Great, great. Thank you for that. And then as far as the supply of, you know, your cobalt supply of Glencore for the 1500 metric tons, is there any way to think about that in the gigawatt hours of battery produced?

Well, I mean, there are basic rules of thumb, right, on this one in terms of how much cobalt you need into NMC 811 type solutions. And it's probably the NMC 811 solution that we will be producing for the customer base in question. We don't want to be very specific on this as of just yet. But I can say that the cobalt that we have secured is currently sufficient to provide the cobalt needs for the MMC volumes that we aim to produce in Gigafactory 1 and 2. But it's not more than just about. But that is of course a good starting point for us. We do see a lot of LFP demand coming, and of course the transfer and technology is chemistry flexible, so we can produce both. We will obviously tailor-make production lines to LFP, and then tailor-make production lines to NMC. Even though we can swap flexibly between them, we would like to avoid that to ensure that we have the absolute highest uptime in each of the production lines that we have. but right now the cobalt supply is sufficient for the MMC based volumes that is in our let's call it offtake agreement definition as we see it today but you know this will probably also increase we do believe that MMC will have a role to play also in ESS and mobility and of course EV solutions moving forward even though LFP is more and more important for a broader variety of market verticals and segments. So all in all a good step forward on the commercial front, a good step forward on the operationalization front and a good step forward on the raw material supply front.

Thank you. I'll turn it back

We have no further questions. I hand back the work to our speakers.

Thank you, Operator, and thank you, everyone, for your interest today. We look forward to catching up with you over the remainder of the year, both virtually and now in person on the conference circuit on the road. So we'll see you all soon, and please feel free to reach out to us with additional questions and feedback. Thank you very much. This will conclude the call.