Norway’s Morrow Nears Battery-Cell Output After Industry Flops

(Bloomberg) -- Norway’s Morrow Batteries AS is poised to begin production of lithium-iron phosphate cells at its factory in southern Norway, looking to learn from the failures of other European producers.

After setbacks at Northvolt AB, Britishvolt Ltd. and Freyr Battery, Morrow is among a handful of the remaining European manufacturers seeking to prove that regional producers can carve a niche in the Chinese-dominated market. The Arendal, Norway-based company is targeting batteries for energy storage systems and heavy machinery, rather than electric cars.

Battery startups in Europe have struggled with intense price competition from low cost producers in Asia just as demand growth for electric vehicles sputtered. With long lead times, high borrowing costs have wreaked havoc on the fledgling industry.

About 300 gigawatt-hours of planned battery production capacity in Europe and North America risks being delayed, with companies taking a “more reserved approach to expansion,” according to BloombergNEF.

Morrow Chief Executive Officer Lars Christian Bacher, who previously served as chief financial officer at oil and gas giant Equinor ASA, said in an interview that he doesn’t see Morrow competing directly with Asia, but instead servicing customers targeting low-emissions value chains and wanting suppliers that are closer to home.

Morrow aims to start up production in the the second quarter on its path to becoming profitable in two years, and has completed “hundreds” of so-called dry batteries, Bacher said at Bloomberg’s offices in Oslo. The next step in the process will be to fill the units with electrolyte and charge them.

“The second, most difficult stage in the product battery manufacturing is charging,” the executive said. “That’s where you see the results of all the previous steps. We are very close to having made it.”

Last year, Morrow opened the doors to its first lithium-iron phosphate battery factory in southern Norway and was awarded a 1.5 billion kroner ($140 million) government loan in December. The loan, which Bacher described as make-or-break at the time, came only a few short weeks after the bankruptcy of much-larger peer Northvolt.

The funding gives Morrow “running room,” Bacher said, allowing it to focus in on production, sales and research and development in the coming year. The company has signed agreements with Nordic Batteries and Finland-based Proventia Oy. It is in talks with about 20 other customers based in Europe and North America, Bacher said, with some willing to pay as much as 20% more for bespoke adjustments to batteries being delivered.

Batteries from closely held Morrow will initially be used in energy-storage installations, including residential, commercial and utility scale projects, as well as rail and heavy transport.

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