Freyr Battery (NYSE:FREY) stock is heating up today on news of an important strategic partnership. The company’s news is that it has begun a discussion of a strategic coalition with four potential partners.
The firms in question are U.S. industrial giant Caterpillar (NYSE:CAT), Swiss mining company Glencore (OTCMKTS:GLNCY), Germany’s Siemens (OTCMKTS:SIEGY), and Japanese electric motor producer Nidec (OTCMKTS:NJDCY). The partnership isn’t official yet. If reached, it would give Freyr a truly global reach, sending FREY stock to new levels. As it would also benefit the four other companies, all five parties have plenty of incentive to reach an agreement.
Does this mean Freyr is a likely winner among electric vehicle (EV) battery stocks as 2023 gets underway? Let’s take a closer look at this deal and what investors should be expecting.
What’s Happening With FREY Stock
News of this possible partnership sent FREY stock rising this morning. While the stock would ultimately slip back down, it has since reversed course and is trending upward again. As of this writing, it is up more than 3% for the day and looks primed to rise even higher. Of Freyr’s four pending partners, three are rising today on the news with gains of roughly 1%. While NJDCY is still trending in the red, its current trajectory suggests it could easily pull back into the green.
News of this potential coalition makes it clear that Freyr is focused on scaling up EV battery operations across the U.S., Europe and likely Asia. This certainly makes sense, as the market for this product is only growing. Recent data indicates that the global EV battery market is expected to expand at a compound annual growth rate (CAGR) of 15.6% by 2030, roughly $84.5 billion.
In its announcement of the coalition, Freyr laid out the principles the non-binding alliance may eventually include. While there are several, they center around the scaling up of sustainable battery solutions across global markets. Co-founder and CEO Tom Einar Jensen issued the following:
“This announcement represents an important first step for FREYR and our four potential global partners as we launch this commercial initiative. Ultimately, FREYR’s vision for this coalition is to accelerate the energy transition across key sectors by scaling up clean battery production from FREYR’s gigafactories under development, and to incubate and develop innovative technology solutions together.”
A Global Expansion
This isn’t the first move that Freyr has made to expand its global market share. In November 2022, it announced plans to construct a gigafactory in the U.S. If the battery innovator can reach an agreement with these four international industry leaders, it will have the chance to truly conquer the global EV battery market in a way that few others have. Partnering with these companies could lead to opportunities outside battery cell production, such as energy storage applications and digital software solutions, all of which would likely be drivers for FREY stock.
As the companies move closer to reaching an agreement, FREY stock will rise even further. The company had high growth potential among EV battery stocks even before it announced plans for this global expansion. Now it has given investors another reason to watch it closely as it prepares to gain a footing in lucrative international markets.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.