FREY - FREYR Battery: Why I Am Bearish
2024-03-13 17:04:13 ET
Summary
- FREYR Battery operates in a crowded market for energy storage systems, facing competition from companies like Tesla and Stem.
- The company's liquidity is a concern, with its market cap currently lower than its cash balance, albeit with a cash runway of two years.
- FREYR's outlook for 2024 relies heavily on a government loan application, making it a risky investment as a pre-revenue company in a competitive space.
It's odd to be bearish on a pick-and-shovel play on one of the most material structural shifts in the global economy in a generation but I'm bearish on FREYR Battery ( FREY ). The energy storage firm is set to provide conventional and semi-solid lithium-ion batteries for utility and industrial-scale energy applications. There is a growing backlog of solar and wind energy projects in the US that are set to drive a generational ramp in energy storage demand. However, FREY is operating in an incredibly crowded market for ESS that is being pursued by behemoths like Tesla ( TSLA ) with its Megapack, upstarts like Stem ( STEM ), and Siemens-backed Fluence Energy ( FLNC ) among others....
FREYR Battery: Why I Am Bearish