T1 Energy Inc.

Welcome and thank you for standing by. Welcome to the Friar Battery Q1 2022 earnings call. All lines have been placed on mute to prevent any background noise. Should you require assistance, please press star zero on your telephone keypad and an operator will assist you. During today's call, there will be a question and answer session and instructions will be provided at that time. I will now turn the conference over to you, speaker. Please go ahead.

Good morning, good afternoon, and good evening. Welcome to Frere Battery's first quarter 2022 earnings conference call. With me today on the call are Tom-Einar Jensen, our Chief Executive Officer, Jan Arve Haugen, our Chief Operating Officer, and Oscar Brown, our Chief Financial Officer. 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 FRER's control and are difficult to predict. Additional information about risk factors that could materially affect our business are available in FRER's S-1, an 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 again, good morning, good afternoon, good evening, everyone dialing in to this First quarterly result of 2022, Breyer's fourth quarterly result report since we went public on the New York Stock Exchange back on July 8, 2021.

Just repeating what Jeff has just been through and then moving to slide three, today's agenda.

What I'm really proud of and find very compelling is that we're here showing you a picture of the dry room in the customer qualification plan. Our Chief Operating Officer will come back to the status of our operational progress later today. But today we'll go through some of the commercial developments which continue at accelerating pace. General market backdrop, our augmented value proposition to deliver into an unprecedented decade, the decade of the battery. We'll talk about our operations and supply chain. Our new Chief Financial Officer will take you through the financial status of the company We'll focus on the strategic priorities moving forward while we open up for a Q&A. We find ourselves in quite challenging environments in difficult times. We obviously reach out to all the people in Ukraine that have a very tough time these days, and that is obviously impacting markets all around us. But from a battery producer's point of view, what this is underlining is the need for an accelerated energy transition. The energy transition requirement is now clearer than ever, and batteries form, as I've been underlining many times, a critically important part of that, not only to decarbonize transportation, but also to decarbonize energy systems globally. And to basically eliminate the need for Russian gas into the European market will need an unprecedented development in renewable energy in Europe, which again will be catalyzed to a large extent by more storage and lithium-ion battery supply.

Treir has very strong momentum across all market verticals.

And we announced yesterday an additional offtake agreement with Poen, and today we're very pleased to announce an additional 25 gigawatt hours of offtake agreements that we have entered into over the recent weeks. This means that we have more than doubled our offtake agreements since our previous earnings call, equating more than 100 gigawatt hours worth of offtake from our initial gigafactories. This principally means that were sold out on capacity from our Gigafactory 1 and 2 in Norway up until and including 2013. Today it is committed to deliver on speed, scale and sustainability and this is ever more important than it ever has been and our team is delivering on our commitments. We are finding ourselves as mentioned in highly volatile and challenging markets but our financial position remains very strong and the financing options that we are progressing is progressing according to plan. Capital is available for the right projects, and we are finding ourselves in a very interesting sweet spot to accelerate the even more urgently required energy transition. Talking about commercial traction. Commercial traction continues on all fronts for Trier. If I'm moving on this slide from the right to the left, let me now start by saying that we've now signed more than 100 gigawatt hours of initial off-take agreements. 50 of those with Honeywell and a leading global ESS player now is in closing stages of negotiation. So 50 gigawatt hours is now close to becoming definitive sales agreements. These are critically important aspects of unlocking project finance to our Gigafactory 1 and 2, which our CFO will come back to in a second. As announced yesterday and augmented today, we have an additional 50 gigawatt hours on top of that 50 on Thank you very much. More than 200 GWh worth of annualized supply leading up to 2030. This could turn Freyr from a triple-digit GWh player to a TWh player over time. This is supporting our ambition to diversify the technology offering as well as diversifying our geographical footprint. To have an integrated supply chain approach with localized and decarbonized Role Materials Supply is a critical component in this to ensure that we have a very cost-competitive solution to offer to our customers. We alluded to yesterday, we announced our agreement with Powen, one of the leading ESS players and longest-standing ESS players in the US. A 28.5 gigawatt-hour off-take agreement is a milestone for Freyer, adding to our already announced agreement with Honeywell and the leading ESS player. But on top of this, We have also signed an additional 25 gigawatt hours from two of the leading ESS players in US and Europe. We will, as we progress towards definitive sales agreements for the not yet disclosed names, be announcing who these players are, but I can assure our investors that these are absolutely leading players in the ESS space, fundamentally supporting the fact that we have a leading technology solution to offer to our customers. The 20 gram technology with Thick and larger electrodes is generating a lot of traction in particular in the ESS space but as you also are aware of with Volkswagen coming into the 24M family towards the end of last year and starting to develop together with 24M EV solutions based on the semi-solid technology the 24M technology suite is applicable across the space. But ESS players in general and this is in particular for us exciting are two now to a large extent being marginalized by the EV demand. And recent price increases from tier one producers in Asia are fundamentally supporting our accelerated development in the ESS space, supported to a large extent by our ambition to have localized and decarbonized value chains to develop security of supply of critical energy infrastructure. Larger and thicker electrodes Thank you very much. We believe many of these will struggle to deliver technology, commercial wins, and ramp up capability. When we move into the next decade, we believe a select few major players will remain, and Freyr is on track to become a global champion in the clean battery solution space. As we presented in the PIPE presentation when we went public on the New York Stock Exchange, Freyr is a technology agnostic or technology flexible organization. and we are increasingly recognized by a broader and broader suite of partners across the value chain as an industrialization partner of choice. Descos has mentioned both for battery cell technology providers as well as for up and downstream players seen from the vantage point of a battery cell producer. Localized and decarbonized supply chains coupled with world-leading project execution and operational excellence skills, which Freire has been very Thank you very much. Thank you. All of this is happening while we are progressing and accelerating our plan to develop the 24M technology suite. We are seeing increasing and accelerating interest of the 24M technology as mentioned and articulated with our traction on the ESS side, but also in commercial mobility and EV solutions. So all market verticals are seeing The dramatic cost potential in the 24M technology, and we are, as previously mentioned, going to be the first one to take this technology to gigawatt-hour scale in the most favored locations globally. What you should expect moving forward from Perrier is a lot of momentum on numerous fronts, including diversification up and downstream, as well as technology diversification to essentially increase our total addressable markets. With this I will turn over to Jan Arve who has in an excellent way been leading our efforts in delivering on our commitments and basically committing to deliver moving forward. So with that Jan Arve, I'll turn it over to you.

Thanks Tom and hello to everyone listening to us today on our call. I'll start with an update on our operations and the key message that I have to share with you today is that our teams are making remarkable progress on both the CQP construction and the pre-construction activity on the combined Gigafactory 1 and 2 in Moerana, Norway. As a lot of other industries, we too experience experiences related to the COVID-19 situation and of course, supply chain disruptions. However, I'm pleased to report that the construction of the Customer Qualification Plant, or the CQP as we abbreviate it, is progressing very close to the schedule. As previously reported, we are expecting to complete the site acceptance test now for the first sample test in the facility in Moerana near year-end 2022. Hopefully, many of you have seen the materials we have posted on social media detailing the work that's been done by our skilled project execution team. Thanks to their effort and the outstanding support they are receiving from our technical staff in Oslo, they are advancing steadily towards factory acceptance testing during this summer and into the fall. Our Gigafactory 1 and 2 team is also making excellent progress in advance of the start of the construction. Groundwork preparations on the site and detailed engineering is largely complete. Indicative quotes from the different suppliers of production line equipment are now being analyzed and the structure of frame agreement contracts are being formalized. We intend to present the project plan for final investment decision to the Freyer board during next month. In the interim, the board has approved additional capital spending to facilitate the long lead time orders on building and infrastructure materials. This is mainly to support and optimize the installation of the production line equipment in the factories. Recruitment for the workforce is progressing well and we are currently updating the standard operating procedure for all key operations. I'm also very pleased with the efforts and achievements we have made in recent months to secure key raw materials for the combined Gigafactory 1 and 2. Admist an increasingly challenging environment for upstream raw materials, our team has completed qualification program on technical compatibility, capacity and quality control for most of the raw materials that we need for the factories. We are now working to finalize the volumes, delivery and pricing terms with our suppliers. At Freyr, we believe that developing the localized and decarbonized and many more. We are already implementing our strategy by moving closer to final investment decisions on our collaboration with Alice to construct an LFP cattle plant in the Nordic region. By localizing upstream elements of the value chain, we can reduce our emission profile Over the life cycle of our battery production. And we can simply simplify the process of delivering decarbonized cells to our customers in Europe and the US. Our teams are focusing on arriving rapidly at final investment decision on the proposed LFP cathode lab in conjunction with the combined Gigafactory 1 and 2. This is not a small undertaking and there have been and will be continue to be challenges along the way. We are in progress of doing something that never has been done before in the Nordic region. A startup of a company is developing now that will be a complex multi-billion dollar manufacturing facilities in a somewhat remote yet industrialized region of Norway, but with unrelenting commitments to decarbonization, operational excellence and strong financial returns on the capital that we are deploying. My reassurance to you today on this call is that this task is in reliable and experienced hands. Our projects, supply chain and technical people are the best that they can do and they are collectively focused on our goal to deliver clean next generation batteries to our customers. On behalf of the entire operations team in Frey, thank you for your confidence in us. Our mantra is to commit to deliver and deliver on our commitments. And with that, I turn the call over to Oskar.

Thanks, Janava. And hello, everyone listening today. Since this is the first time I've had the privilege of speaking to you at Friars as the CFO, I thought I'd start by sharing some of my observation as a new joiner to the company. I'm very excited to be here at Friar because of the people, the opportunity, and our unique competitive position in the sector with strong secular, not just cyclical, tailwinds. After just five weeks with the company, I'm incredibly impressed with the quality of the people we have in our organization. Thayer has attracted seasoned, dynamic leaders and vibrant, creative teams around them, driving our execution, our strategy and our business development. I personally believe Thayer is the best position new battery industry play in the market. Less than a year ago, the company brought together the best of Norway and the United States. From Norway, incredible people with both a strong entrepreneurial spirit and deep execution and operational experience and excellence for major projects around the world. The country has a very supportive government, vast natural resources including abundant cost-competitive renewable energy, and a global credibility that's unmatchable around sustainability and the energy transition. From the U.S., the company enjoys a New York Stock Exchange listing, a substantial U.S. investor base, access to the U.S. capital markets, U.S. Technology through MIT's Spinoff 24M and its investment by and U.S. joint venture with affiliates of Koch Strategic Partners. When you couple our brilliant people with our growth trajectory and the growth trajectory of the battery market overall and Thaya's opportunity to develop sustainable, competitive advantages from our decarbonization commitment and our technological differentiation, you have a powerful story. Thaya is part of the solution for energy inflation, energy security, and climate change. As excited as I am to be here, I also recognize the importance of capital formation to enable us to deliver on our strategic objectives. We are moving swiftly toward initial gigascale development, and we are being presented with several promising business development opportunities, all of which require additional capital over time. Turning to slide 11, I'll note that we're already in discussions with several key stakeholders to explore options to finance our growth as efficiently as possible. The potential sources of capital for Thaia can be grouped into three buckets. The first is support from government entities in Norway, the EU, and the United States. Thaia's mission to decarbonize battery production at gigascale is resonating within all of these spheres, and in the wake of the deeply troubling events in the Ukraine, it's becoming increasingly clear that developing localized supply chains of batteries is a matter of national security. The forms of potential financial support that could originate from government organizations include grants, direct lending, and guarantees, all of which could enable us to accelerate our growth ambitions. The second major source of potential funding is, of course, project financing. As we convert our initial conditional off-take agreements to bankable, definitive sales agreements, Thayer will accelerate the project financing process with our banking partners and government agencies. Although project financing is a time-intensive and lengthy process, The quantum and low cost of capital that should be available to us as construction begins to ramp up will be exceptionally helpful, and this market remains quite strong today. The final potential funding bucket is from private and public capital raising activity. We are quite aware that the capital markets have been volatile and challenging thus far in 2022, but we believe that value's unique story and the opportunity in the battery market will continue to attract interest from global capital providers and other stakeholders. Our team is evaluating several potential financing structures, and we look forward to sharing additional details with you when appropriate. Turning to slide 12 now, I'll walk you through a brief financial overview. The key point is our balance sheet remains incredibly strong. We concluded the first quarter of 2022 with $525 million of cash and equivalents and no debt, which provides us with great financial flexibility. As we look ahead to the second quarter of 2022, Our total net cash uses, including operations and capital expenditures, should be expected to increase from what we saw in the first quarter. This is due to both organizational development and preparatory work on the Gigafactory, in addition to high activity on the construction of the Customer Qualification Plant and the Testing Center nearby. Our priorities for the remainder of 2022 are to deploy growth capital responsibly, evaluate and select the best strategic investment options for Freyja, and to progress our capital formation efforts. Our finance and leadership teams are working around the clock and in many time zones to advance these objectives. We're excited and we look forward to exploring opportunities to partner together with our investors, our industrial partners, and other stakeholders as Friar grows. And with that, I'll turn the call back over to Tom for some closing remarks.

Thank you, Oskar, and thank you, Omar. It's, of course, easier to be the CEO of Friar when I have such capable people helping and supporting the development of the company. So to summarize, today's strategy is built up around three core tenets. These tenets are speed, scale, and sustainability. We are committed to deliver, and we're delivering on our commitments. Our near-term priorities is to fund the expansion of our growth trajectory. The capital formation plan is accelerating on multiple paths. Our intention is to prioritize speed and to optimize the cost of capital. Capital is available, and it's deeply supported by Norwegian, EU, and US governmental support across the capital structure. We are continuing to expand and establish our operations and supply chain. We're starting to look like a battery company. We're releasing additional CapEx for the pre-construction of Gigafactory 1 and 2, and we're reaching FID on Gigafactory 1 and 2 in parallel with the proposed LFP capital plans, all of which is going to happen later this year, as previously announced. On the commercial side, we have very strong momentum, which is continuing to grow on a daily basis. We are focusing on converting our initial conditional off-take agreements to definitive sales agreements, and we expect them to exceed 100 gigawatt hours by 2030 and to have them converted later this year. We will secure additional conditional off-take agreements in the ESS and now also in the mobility space with an additional 100 gigawatt hours by 2030, supporting an accelerated development of additional capacity beyond Gigafactory 1 and 2. Finally, we're now seeing very strong traction based on an industrialization partner of choice approach, vertically integrated up and downstream in a partnership-based way, but also with diversification on technology that we're seeing very strong traction across all market segments, including mobility and EV commitments. We are in dialogue and commercial negotiations where we exceed 200 gigawatt hours in yearly offtake potential by 2030. and our ambition is to secure at least 100 gigawatt hours per year of that well before 2030 on an annualized basis, allowing us to unlock further capacity expansion in the geographical regions that we are currently located in and potential others. So with that, I'm going to turn it over to Q&A. I thank everyone for your attention. Thank you for your trust and patience with Dreyer. We will continue to look over the horizon Commit to deliver and deliver on our commitments. Back to you, Jeff.

Thanks, operator. I think we can open up the line for questions now.

Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. One moment, please. Your first question comes from the line of Jose Acemendi of JP Morgan. Please go ahead.

Tom, Jose, JP Morgan. A few questions, please. The first one, I'd love to hear when we think about your ESS contracts, can you maybe lay out a little bit what are the unique selling points or the reasons why you're winning this contract? What makes Freya different to the competitors up there? And then second answer, maybe, just to put the questions together. As we try to map a little bit revenues and capex on a five-year perspective, I'm thinking about slide number five. How do we put together there, you know, the revenue projection four or five years out? When do you start getting the revenues into the business? And second, can you maybe give us a bit of a... Not a five-year capex projection, but a 12- to 16-month capex projection so we can model the company a bit better. Thank you.

Thank you, Jose. So on the first question, why we are progressing and winning contracts, ultimately I think that question should be posed to the ones we are winning them with. But I think the way in which we are positioning this Thank you very much. are today's solutions that can be delivered with lithium ion battery solutions and the 20 perm technology where we can produce larger and thicker electrodes basically reducing the need for additional let's call it modules and packs and racks around them because we're just building larger energy carrying solutions Thank you very much. and therefore they're being in a way pushed out a little bit and they want to try to secure additional supply sources. So those are some of the key points around why we are winning these contracts. We do believe that we will continue to generate a lot of traction in the ESS space. We also do believe that the ESS space is much larger than most people have anticipated so far for the exact purpose of decarbonizing energy systems. The sun shines when it shines and the wind blows when it blows, but we need to store that energy to basically have electricity at night and when the wind isn't blowing. So 80% of the world's electricity generation today, give or take, is non-renewable. And it needs to move to 20% non-renewable in less than 20 years. And that is impossible without large amounts of storage. And this is now gradually starting to, I think... Thank you very much. We said that we were going to target 43 GWh of installed capacity by 2025, 83 GWh of installed capacity by 2028, and more than 100 GWh of capacity in the 2030 horizon. We have no reason to sort of change that assumption today. We are looking into to what extent we can potentially accelerate it. We are, as also mentioned by our chief operating officer, of course exposed to inflationary pressure. We're putting together an updated project finance package with our project finance banks and advisors and looking into it. What I can generally say is that, of course, Currently, we're seeing price inflation also impacting the battery cells. Some of our Asian competitors have been increasing prices on LFP-based cells two times of 20% each. We still think that over time, those prices will start to gradually come back again as more and more raw material supply comes on stream. Our general sales agreement will have pass-through mechanisms in them to cater for those price hikes on certain raw materials. So that price increase really is something that is shared to a large extent with our customers. On the CapEx front, we're also, of course, experiencing inflationary pressure. Everyone with a Reuters screen can obviously sort of see that. But the relative CapEx advantage of the 24M technology remains the same. and we previously argued that we believe in a 50% lower capex spend for our technology if you compare it to conventional as long as we build at large scale. That is why also having this commercial traction and having an ability to have this ability on larger installed capacity will allow us Thank you.

Thank you. Your next question will come from the line of Mahid Manslaif of Credit Suisse. Please go ahead.

Hey, hi everyone. Thanks for taking my questions. Just maybe quickly on the technology side, you did hear a lot of emphasis on LFP on this call. Could you just clarify on that end, like on your mix of LFP and GigaFactory 1 and 2 will predominantly be, if not entirely be, an LFP-based solution.

That is obviously supported by the off-take agreements where all the ESS players are predominantly focusing on LFP solutions due to the lower cost of that technology and also the inherent characteristics of LFP with lower energy density potentially than NMC but obviously with a very long cycle life but typically you want these ESS solutions to last for 20 years plus and therefore having lower energy density and longer cycle life is really again very suiting the 24M technology very well. I'd like to sort of hurry to mention that our production platform is chemistry agnostic which means that if we were to get traction which we're already seeing that we have Thank you very much. Thank you very much. Giga factories through the partnership with Flaheren and Coke and we got an initial 130 parties who were interested in attracting us as a producer we're now going through you know a funneling and high grading let's say process around that and we'll come up obviously back to our investors with updates on this when we have a little bit more free to offer but the long story short LFP is behind most of if not all of the offtake agreements that we have announced so far

Gareth Nurse, that's a really helpful caller. And in just a sense, the value for the new 50 gigawatt hour supply agreement, is that like the dollar amount you could kind of talk about, or should we expect it something similar to what we saw with the Honeywell in the previous years?

So, Maheep, I think, you know, right now, the price pressure on batteries is and many of the Asian providers have increased their prices quite significantly, driven in large part by the increase in lithium prices. Now, our commercial agreements with these players will have pass-through mechanisms in them, so depending on where you are and what sort of underlying prices you're getting for the raw materials, that will ultimately impact The price on an ongoing basis of the products that we produce. Generally speaking, we are committing to reduced prices of these products over time as we are continuously increasing and improving the energy density and the general technical characteristics of the batteries we produce. We're also constantly focusing on increasing the overall equipment efficiency which is a function of yield and uptime in the machinery and again here that conversion cost part of the picture is an area where Freyja's operators and Freyja's experienced personnel led by Amarba will be world leading in terms of reaching as high yield and uptime in our machinery as possible. We come from an industry, many of us in the aluminium industry, where a very high OEE is always kind of targeted. and the organizational structure and how we're sort of implementing this will basically support getting very high and we believe higher uptime than what is common in the conventional lithium-ion battery space today and the 24M technology being a much simplified production process should also allow us over time to get better and better in producing this. So over time we should expect the prices to come back to longer-term trends of reduction, albeit at a slower reduction pace than what we've seen in the last 10 years. So this is a long way of sort of not answering your questions or to speak, but I think you would have to think about long-term trends in pricing. And we are implementing a technology that has a significant cost advantage relative to marginal cost and marginal producer. And as these markets get larger and larger, you would start to see more normal, let's say, behavior also on the pricing side for more and more standardized products across the different chemistries.

I really appreciate the answer here, and I guess the cost factors just make it somewhat difficult at this stage. But I guess one last question from me, just on the conversion of the

Well, I mean, it's a normal process. Nothing sort of sinister or very complicated about it. It is basically ironing out the specific technical and commercial details and negotiating that in, let's call it the environment we find ourselves in. These are advancing and getting into closing mode for Honeywell and the global ESS player, as mentioned. We will be announcing the conversion of those imminently, and we will start The similar process with the three additional ones immediately. We're already in that process. So you should expect us to continuously announce additional, let's call it initial agreements, and then over time converting them to firm agreements. And when we convert them to firm agreements, of course, more commercial details around the agreements will be communicated. And this is also, as mentioned, important information. From a project finance point of view, of course our lenders will require visibility on the commercial terms of the agreements that will underpin the development of capacity, and clearly that is going to be required for that to be unlocked, and we have no reason to believe that we're not going to get there in time for the FID that we have previously communicated.

Your next question comes from the line of Nelly Isla of Clarkson Securities. Please go ahead.

Good afternoon, guys. First of all, congratulations with the wrapping up the quarter and, of course, the latest conditional estate agreement you announced. It was nice to see that they also started touching up on supplies from future gigafactors in the US, and I know you've touched upon this on the last question, but could you provide any color on your progress there and what we could expect in the near future? And if any timeline details, that would be great. And my second question is regarding your cash burn guidance from slide 12. You mentioned that there will be some slight increase in the Thanks for that question and let me take the first one and then I'll have Oskar take the second one.

So as previously mentioned, 43 gigawatt hours installed by 2025, 83 gigawatt hours by 2028, and more than 100 by 2030 is what we have previously communicated. We're looking into whether we have an opportunity to accelerate some of that. And once we've sort of done all the math on that, we will obviously update the market accordingly. When it comes to Gigafactory 1 and 2, that's an 18 gigawatt hour LFP. We've created what we label an idealized 8 production line system, which then forms as a blueprint for additional Gigafactories to be developed. We've also now come quite far in doing the detailed investigation of what we label Gigafactory 3 and 4, which we're targeting to locate right next to the customer qualification plan. So the idealized footprint can then be localized there. Constantly over time, we will obviously also be improving the production process and implementing new generations of the 24M technology, which basically means increasing the speed of production. So going from 20 to 30 to 40 meters per minute in sort of how we're pushing the raw materials through the system. That of course increases the capacity That we can produce with a given system. If we were on top of that to sort of move from LFP to NMC, the energy density in NMC of course means that you're getting more watt hours per kilogram and therefore more kilowatt hours per production line. So to actually sort of give very precise guidance on where this is going to be is a moving target, let's say. It is not difficult for me to imagine much higher numbers, much faster than what we have previously indicated, but that needs to be supported by commercial traction, and it also needs to be supported by, of course, getting bankable agreements in place so that we can project finance a large part of that cap expense. So on that note, I'm going to hand it over to Oscar to talk about the other question.

Yeah, so I'll disappoint you on the longer outcourters, of course, similarly, but a lot of this has to do with what Tom just mentioned in terms of the timing of Some of these decisions and so forth for the out-quarters. But for next quarter, for this quarter we're in now. So in the first quarter we spent, from the balance sheet, $41 million net. And so this quarter, as I mentioned, it'll be a bit higher. So directionally, again, very hard to target because of all the changes in working capital. We have some small grants that we expect to come in and things like that. But focus just on our change in cash. Directionally more towards $50 million than $40 million last quarter I think is the way to think about it, but some of that could move around a bit dramatically. And the breakdown is also going to be moving, right, whereas last quarter we had many OpEx items that will be in the future become CapEx as we get closer to taking FID and complete some of the engineering and so forth. So hopefully it's directionally helpful, but that's kind of where we were getting to.

No, yeah, that's great. Can I just follow up with one more question, actually related to my first question? So my impression is now that you're targeting potential, I know everything's moving target, but Gigafactory 3 and 4 prior to any factories in US and or Finland. Is that the case or have I misunderstood?

So I don't, that might be the case, or we might move faster In Finland or in the United States. So I think we are contemplating making additional investment decisions in all three of these locations quite rapidly after making the FIB of Gigafactory 1 and 2. But we need to sort of get all the ducks in a row, so to speak, and ensure that, you know, raw material supply is secured. Of course, the offtake agreements are there and that they're bankable and that we have funding in place for it, etc., and then we need to marry that up with whether we are going to produce all of the cathode material ourselves so whether we sort of in the interim source it from an you know an additional qualified supplier etc etc so this is a fairly complicated puzzle but the good news is that's also alluded to by Almarva they have a very capable team who have done this many times in other industries built multiple projects in parallel secured supply chains etc. etc. And this is now what we're doing, albeit for the first time in Norway, but we're doing it at lightning speed in my opinion and moving quite forcefully forward. So we'll come back to the market and our investors with updates on all of this as we have a little bit more definition around it.

Alright, thank you guys. Thank you for qualifications.

Your next question comes from the line of Evan Silverberg of Morgan Stanley. Please go ahead.

Good morning, guys. Evan Silverberg on for Adam Jonas. As you guys are having your early discussions with government entities, what exactly do they need to see from Frayer prior to providing funding? Thanks.

Good morning, Evan. Great to hear from you. So let me talk about Norway first, and then maybe, Oskar, you can talk a little bit about DOE as two examples, who are obviously also in dialogue with EU-based institutions and the European Investment Bank and other institutions. But from a Norwegian government standpoint, in June, the Norwegian government will launch a national battery strategy. and it's quite rare that they actually establish battery strategies for a or strategies for a particular industry but they are increasingly recognizing that the battery value chain is a very suitable let's call it energy transition industry for Norway to be a leading part of that has been a rapidly working I would say five six month process where we have obviously been quite integral into it since we are the leading and largest initiative on battery production in Norway. So we've had multiple iterations with them where we provided them with our input not only on what a such a strategy should include but also of course what commercial stakeholders like us would require. What we have submitted to them is that there needs to be a level playing field. Basically meaning that grants such as Other battery initiatives in Europe are receiving under EU competition law needs to be similar in Norway. We have said that guarantees leveraging basically the Norwegian government's balance sheet, which as we all know is fairly significant, needs to be leveraged to ensure that we can get as high fraction of a Project Finance based structure guaranteed through internationalization guarantees to basically promote and accelerate the development of green solutions in Norway and different sorts of bridge mechanisms until the project finance solution is in place, etc. So all of this is resonating very well. and we will know a lot more about this when the National Battery Strategy is launched in the not-so-distant future, so it's weeks out really. So stay tuned, Evan, and then you will get more visibility on this. This is obviously key for us to basically provide risk mitigation for building gigawatt-hour scale facilities of a new industry. That is inherently, of course, risky. But they're increasingly understanding it and supporting it greatly. So, Oscar, maybe some thoughts on the DOE. Sure.

Before I get there, too, I mean, for example, in the EU, we've already made progress. We have applications in for significant grants as well as guarantees and the support, as Tom mentioned. So, in some cases, we've matured to that level to have those applications in. You guys probably follow in detail the DOE in the U.S. has a whole bunch of programs, particularly on the loan side. that are very attractive for building facilities like what we're building in Norway in the U.S. And so one of the things you kind of need is progress and development and a detailed plan of what you plan to build and where you're sourcing and raw materials are coming from and so forth and the like. So we've been in good dialogue with them on a number of programs as well as on the grant side. And so it's just a matter of progressing those. Some of these are brand new. Some of these have been around a little bit. But as the programs that the administration are rolling out, you'll get more clarity. We're right in there trying to understand that. We've got a call on Friday, in fact, and I was just there in Washington a couple weeks ago. So we're active on this, and it's kind of progress on both sides that needs to be shown. But right now, we don't have a specific plan lined out for the U.S. We're looking at site selection and the like with our partners. But that's the kind of thing you need. I think the requirements are similar as in Europe, but just sort of different, you know, with the U.S. spin on it.

Thanks. And just one follow-up. Obviously, Ferrer has a goal of creating local supply chains. So specifically for battery-grade lithium carbonate and hydroxide, how and where are you guys thinking of potential sourcing? Thanks.

As we have indicated, we are looking at this together with the pre-approved supplier Alisa from Taiwan, and we are looking at different locations predominantly now, first of all in the Nordic region, and as we also commented during the presentation earlier today, that This we try to do in parallel with the final investment decision for the Gigafactory No. 1 and 2. So obviously it's mainly in the Nordic region, which is the first step.

And in terms of raw material supply into that, as per your sort of deeper part of the question, Evan, so lithium hydroxide and lithium carbonate, we are... already in discussions with various suppliers of that into that but through essentially the cathode producer and whether that becomes you know a joint venture or a licensing arrangement is something that we'll get back to but obviously securing the raw material and lithium hydroxide and carbonate and both of them actually was needed is progressing well we don't have any sort of Real concerns around it, even though of course we are monitoring also the challenges and volatility in the market. But longer term there is, and tied to when we are starting up commercial production, we have a plan that sort of matches up with that. And initial ongoing deep discussions really support having this online in time for ramping up the commercial facility.

Great. Thank you very much, guys.

There are no further questions at this time. I will turn the call back to Mr. Jeff Spittel.

Great. Thank you, Operator. Thank you, everybody, for your interest this quarter. We will talk to you soon on the road and look forward to catching up in person or virtually. Thanks again. That will conclude the call.