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FREYR Battery (NYSE:FREY) stock is one of the few bright spots of the market today, currently trending up more than 8% on a new battery agreement. This morning, Freyr announced a binding sales agreement with Japanese electronics company Nidec (OTCMKTS:NJDCY). Freyr will supply the company 38 GWh lithium-ion battery cells from 2025 to 2030.

This deal represents an expansion of these two companies' previous, conditional offtake agreement which saw Freyr produce 31 GWh cells for Nidec. The new deal increases both the energy density of the cells and transitions the partnership into a binding sales deal. Under the new deal, Freyr will have the option to upsize volume to 50GWh during the agreement period, with stipulations to "potentially add volumes past 2030."

This deal has an estimated gross value worth more than $3 billion, making it one of the most substantial energy storage systems (ESS) battery cell contracts around the world.

FREY Stock Soars on Promising New Battery Cell Deal

This deal certainly has some positive implications for the future. Freyr CEO Tom Einar Jensen had some kind words for revamped partnership:

"We are exceptionally pleased to announce our firm sales agreement and deep commercial collaboration with Nidec Corporation, the world leader in electric motors and a globally leading engineering, procurement and construction solutions providers to the ESS market […] Today's landmark sales agreement inclusive of optional volumes represents roughly 50% of our targeted production from Giga Arctic by 2030. Combined with Nidec's trust in FREYR as a joint venture partner for ESS solutions this represents a fundamentally important milestone to support the conclusion of our ongoing project financing efforts at competitive terms."

As part of the deal, Freyr will produce its new line of battery cells via its Norway-based Giga Arctic Facility. This location is currently in the process of being built. As per the projected timeline, Freyr will begin rapidly expanding cell production in the first half of 2024.

Freyr has been one of the few winners of the stock market this year. As of this writing, FREY stock is up more than 15% year-to-date (YTD). Currently, the S&P 500 is eyeing losses of around 17% YTD.

On the date of publication, Shrey Dua did not hold (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.

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