The battery sector is one of the industrial sectors the EU is currently pushing very hard to foster the European production. Under the coordinated policies, legislations and financial support at the EU and member state levels, battery cell maker startups are coming up in Europe one after another. FREYR, based in Norway, one of these startups, is drawing attention as a company that will contribute to the European sustainable battery production.
MIRUPLUS had a chance to conduct an interview with Ryuta Kawaguchi, CTO at FREYR and he talked about the business focus of the company and the battery trend in Europe as well as his own story about coming to Norway.
Q: Could you tell us briefly about your background and how did you come to Norway?
A: I have engaged in the development of electric vehicles and batteries at car makers, Toyota and Nissan, for quite a long time. The last three years, I worked for Dyson on the development of EVs. As this company decided to stop the project, I chose to come to FREYR after receiving a number of offers from others.
Q: As for FREYR, we consider it as a competitor of Northvolt, another rapidly growing startup.
A: The reason I chose FREYR among many is because Norway provides almost 100% of renewable energy. Rich in hydropower, this country can offer the cheapest energy in Europe, which is carbon free. It is one of the most ideal locations for an energy-consuming industry like battery production. Also, a humid environment is not suitable for battery production, it needs to have a completely dry condition. In addition, as the production process generates substantial heat, a cooling system is necessary. In Norway, generally the average temperature is low, and this is again a blessed condition for battery production. Moreover, the educational standard of this country is very high, and it is easy to find highly skilled workers.
Q: As for equipment or machines to produce batteries, are they all European-made?
A: No, Europe does not have much experience in battery making. Most equipment we use are from Asia. We are considering partially using European machines, but the Chinese and Korean are cost-effective while the Japanese are superior in quality. However, I think both Chinese and Korean technologies are catching up to the Japanese. We need to take several factors into account when selecting the necessary equipment together with a possibility of local maintenance.
Q: Your company assembles batteries but active materials for cathode or anode will be imported?
A: First, we are focusing on producing battery cells. However, in order to achieve the production of CO2 free batteries, it is necessary to localize the supply chain. For this reason, in the long-term, we are looking at the integration of suppliers. Our business model is to grow in production and technologies through partnerships and we are not considering designing batteries from scratch at this moment. It is the same as for raw materials. We would produce materials locally by partnerships with material suppliers.
Q: The production of anode or cathode is considered to have high carbon footprints in LCA. Given the conditions that you mentioned earlier, I assume your company has an advantage in reducing carbon footprints in LCA.
A: Certainly. We will be able to significantly reduce CO2. We believe that this enables us to compete with low-priced Chinese batteries.
Q: Regarding graphite you use for your production, will it be procured locally?
A: We are looking at it. First, we buy it from Asia. But we are planning to procure them locally or from Scandinavia. We will not produce active materials by ourselves, but we are currently in discussion with possible partners. This includes some suppliers in Japan and Asia as well as Norwegian and other European. We recently announced a partnership with MRC, a natural graphite supplier. This company extracts graphite from a mine located in the north of Norway and they are currently planning to produce anode materials. Elkem is our artificial graphite partner. The process (of this production) needs a significant amount of energy. At this point, the country offers an ideal condition to artificial graphite production which is its key industry as well as aluminum refinery.
Q: Regarding battery chemistries, what would be your choice? (e.g., NMC, NCA, or LFP)
A: We are looking at both high-energy density and low cost, therefore both LFP and NMC. On the other hand, we are in search of new active materials.
Q: LFP is not considered to be suitable for recycling. From this reason, there is a forecast in which this technology will not grow further under the EU legislation. How do you respond to this?
A: It is true that LFP is cheaper than NMC and its cycle life is much longer. The (new) EU legislation draft is proposing a minimum use of recycled content, however, I don’t think it would exclude materials whose environmental impact is low. FREYR’s goal is to produce the most environmentally friendly batteries as well as cost-effective and responsible.
Q: When will the operation of your facility start?
A: The pilot line will start next year, and the mass production is scheduled to start in 2023.
Q: While the EU is pushing battery production inside the EU, we observe that Germany has a particularly strong tie with China. How do you see it?
A: There are companies such as CATL or Microvast who are building their facilities in Germany. SVOLT will join them and BYD is also considering the entry. This is partially because the German municipal governments are financing such projects. I don’t think Germany is acting differently from EU member states. We see battery startups are coming up one after another in Europe, for example, in France, Italy, or Slovakia. As Germany has a high number of car makers, consequently the number of battery makers is slightly higher than in other states.
Q: Norway has the highest rate in EV sales. Does the county offer abundant incentives?
A: In this country, the BEV share in newly registered vehicles already reached almost 70% while PHEV has a share of 20%. The account of this growth stems from the provisions such as very high taxes or toll charges for combustible cars. Instead of offering subsidies for EV purchases, the government increases the tax rate on something that they want to reduce and the choice of technologies to replace [combustible cars] is left to the self-adjusting functionality of the market. I find it very logical. In addition, Norway has an advantage of cheap electricity. Consequently, the EV sales are growing. On the other hand, the price of combustible cars is extremely high. I think this works only in a country where the average income is very high like Norway. By comparison to the average income of Japan, it is close to 2.5 times more. Other countries are promoting EV sales by offering high subsidies. But this is not a policy that can last forever. In order to boost EV sales further, the inevitable is to reduce drastically the cost of batteries.
Q: Your company has a business partnership with Glencore. Are they your cobalt supplier?
A: They are one of our partners, but not the only one. We don’t buy metals directly, it is our suppliers who do it. What we do is limited in this sector.
Q: Are you already in discussion with car makers for battery supplies?
A: Yes, we are in discussion with some car makers. But it usually takes 4 to 5 years to reach a final conclusion. As car makers want to have CO2 free batteries, we have been approached by them.
Q: The environment where the production of CO2 free batteries is possible is a big advantage of Norway. Many battery makers may be looking at the country to produce their batteries….
A: We already have some competitors. Panasonic has announced that they were considering building a facility. In addition, some materials suppliers are considering coming to Norway as well. Our goal is to plant a battery industry inside the country and the government is supporting us.
Q: Your company is looking for partners. Do you have any message to Japanese companies?
A: While big opportunities are waiting here in Europe, I find that Japanese companies are not quick enough [to grab these opportunities]. China and Korea are already building their facilities in Europe together with material suppliers. There are certain risks for Japanese makers to enter the EU market alone. In order to minimize them, we suggest a partnership. I know some of Japanese material suppliers and battery makers are showing their interests. But they are far slower than Chinese and Korean companies.
Q: Things take time in Japan….You left Japan, because you find Japanese companies less attractive?
A: No, I have nothing against Japan nor Japanese companies. What is in mind is to do something to contribute to the world and what I could do most to fulfill this wish. My current position [at FREYR] allows me to contribute toward the reduction of environmental impact. While the rest of the world is catching up, I still think that we Japanese have an advantage in our technologies. My role is to optimize these to tackle environmental issues.
Y.SCHANZ
Vienna-based freelance writer & researcher
Field of interest: EU legislations, environmental issues, political theories, military affairs
