What happened
Shares of Norwegian battery start-up Freyr Battery (FREY +8.15%) were trading sharply higher at midday on Wednesday after the company announced a deal to sell 19 gigawatt-hours (GWh) of batteries to Honeywell (HON 0.88%) over the next several years.
As of 12:15 p.m. ET, Freyr Battery's shares are up about 11.6% from Tuesday's closing price.
So what
Freyr Battery is a start-up aiming to bring advanced lithium-ion battery cells to market at scale. The company has a factory under construction in Norway and is considering additional plants at sites in Finland and the United States.
The deal announced today with Honeywell isn't a straight battery sale, it's an exchange. Freyr has agreed to incorporate several of Honeywell's industrial-technology offerings in its manufacturing process, in its Norway factory, and elsewhere. In exchange, Honeywell will buy 18 GWh worth of Freyr's battery cells between 2023 and 2030 for its commercial and industrial energy-storage solutions.
For a small company, it's a big deal, and that's why the stock is up today.
Norwegian lithium-ion battery start-up Freyr Battery went public on the New York Stock Exchange in 2021. Image source: Julian Cannon for Freyr Battery.
Now what
Battery-stock investors can look forward to a more detailed update from Freyr's management team when the company reports its fourth-quarter and full-year 2021 earnings, likely in mid-February.
