Freyr cancels $2.6 billion gigafactory in Georgia, sells site

Freyr Battery has decided to abandon its plans for a $2.6 billion lithium-ion battery plant in Coweta County, in the U.S. state of Georgia, which would have created more than 700 jobs.

The decision to cancel the plant was communicated in a letter to county leaders, citing rising interest rates, falling battery prices, changes in management, and a realignment of the company’s near-term strategic goals as reasons for the withdrawal.

Instead, the company said it would now focus on its newly-opened, 5 GW solar cell fab that it bought for $340 million from Chinese PV heavyweight Trina Solar in November 2024.

Freyr’s announcement marks the second gigafactory plan in the U.S. shelved within a week. Only a couple of days earlier, Kore Power abandoned its efforts to build a $1.2 billion battery plant in Buckeye, Arizona, highlighting the difficulty in breaking into a highly-competitive, low-margin business such as battery manufacturing.

Globally, this trend is increasingly pronounced. According to the data from the Benchmark Mineral Intelligence, 2024 saw the highest gigafactory capacity cancellations on record with more than 312 GWh of projects worldwide shelved by the end of November. These cancellations have been primarily from less experienced Tier 3 manufacturers in China.

Big plans

Plans for Freyr’s Giga America plant were laid down in November 2022. Initially, the company planned to invest $1.7 billion to build the manufacturing facility with an annual output of 34 GWh. At the time of the announcement, the Coweta County project was the second-largest battery factory in the planning worldwide.

By 2029, the investment was expected to surpass $2.6 billion, with subsequent expanding of annual manufacturing capacity.

Giga America was expected to produce lithium-ion cells for both electric vehicles and energy storage applications. However, construction on the 368-acre (149-hectare) site never began.

The Georgia Department of Economic Development said the state conveyed a $7 million grant to buy a site for Freyr in Newnan, and the NYSE-listed firm is now expected to repay the money.

Founded in 2008, Freyr had an ambitious 200 GWh production target by 2030 across its gigafactory projects in Europe and the U.S. In 2023, it decided to minimize all investments in its flagship Giga Arctic project in Mo I Rana, Norway, as well as other European projects, and only focus on scaling in the U.S.

In a bid to maximize its eligibility for the U.S. tax benefits of the Inflation Reduction Act (IRA), Freyr moved its corporate headquarters from Norway to Newnan. On Monday, the company announced Austin, Texas, as the location for its new global headquarters “to geographically align the company’s workforce with its operations and strategy to provide solar modules made in the United States.”

In the same announcement on Monday, Freyr said that it has entered into a definitive agreement to sell its 368-acre site in Coweta County, Georgia, to an undisclosed party for gross sales proceeds of $50 million.

The transaction is expected to close on February 15, 2024. Estimated net proceeds to Freyr are expected to total $22.5 million following repayment of previously received state and local grants, the company said.