The state and local incentives offered to Freyr Battery are detailed in documents obtained by The Atlanta Journal-Constitution through the Georgia Open Records Act. Freyr announced plans in November for a $2.57 billion factory in Coweta where it employ 724 workers making energy storage systems and lithium-ion batteries.
Freyr ranks among the legion of companies moving to Georgia to produce electrified products, be it electric vehicles or batteries, a priority among state leaders.
Freyr told the AJC that the state’s education system and ability to recruit workers capable of thriving in the burgeoning clean-tech sector were the deciding factors when choosing Georgia over more than two dozen states for its first North American factory. But the package of incentives offered by Georgia and Coweta leaders helped tip the scales.
Much of the global supply chain for batteries and EV components is based in China. The Biden administration has pumped billions of dollars into grants, tax credits and other federal incentives to entice companies into establishing battery and EV manufacturing in the U.S. It’s part of ambitious goals to fight climate change, create jobs and reduce the nation’s dependency on its geopolitical rival.
Local and state governments, meanwhile, have clamored to win these corporate investments, dangling billions more in property tax breaks and other freebies. State and local incentives are a common though controversial currency in the war for jobs, with critics saying the inducements come at the expense of existing residents and businesses who have to shoulder expenses from supporting these new industries.
Greg LeRoy, executive director of left-leaning incentives watchdog Good Jobs First, said he worries Coweta County residents will have to cover local government costs incurred by Freyr’s new factory until the tax abatement ends.
“You’re going to have to hire more teachers, pick up more trash, widen more lanes and answer more 911 calls,” he said. “If this company isn’t paying for a share of those induced costs, then everybody else gets stuck with the bill.”
Pat Wilson, the commissioner of the Georgia Department of Economic Development said Freyr represents a new niche within the electric battery and vehicle ecosystem and helps diversify the state’s fast-growing sector.
“You have a great company with a technology that is vital to this transition to electrification,” Wilson said of Freyr. “It’s a battery sector that we don’t currently have in Georgia and really (don’t have) in the U.S. as a whole.”
Georgia’s increasing talent pool cemented Coweta County as Freyr’s final choice, Freyr CEO Tom Einar Jensen said.
“The most important factor for selecting our first US plant location was talent,” the company said in a statement. “... Our decision to select Georgia was a combination of several factors, but the total package of financial incentives for Giga America does of course play an important role.”
The single largest component of the Freyr inducements were about $228 million in local property tax breaks that will stretch over 20 years. Coweta also offered Freyr a $20 million grant. The state agreed to provide nearly $90 million in sales tax exemptions for qualified machinery to be installed in the factory and construction materials used in building the plant. Nearly $11 million in tax savings will come from state tax credits granted for new jobs created. A $7 million state grant will offset land costs.
But the Freyr package could grow in value over time. No value was assigned to other potential tax breaks for clean room equipment, energy used in manufacturing and a handful of other incentives that Freyr could qualify for based on future expenditures.
Desirable jobs
The sprawling Freyr factory, which will be called Giga America, will rise near Amazon and Shopify distribution centers of I-85 near Newnan.
Sarah Jacobs, president of the Coweta County Development Authority, said Freyr will help add some industrial diversity to an area flush with logistics and shipping companies.
Within the incentive package offer, Freyr will need to employ 724 workers at the new factory with an average salary of more than $60,000. Jacobs said that’s 127% of the average wage in Coweta.
“Those are exactly the kind of jobs we want to attract to the county,” she said.
Coweta County and Arizona were the final two options Freyr considered, Jacobs said.
The Freyr incentives are large but pale by comparison to inducements offered for EV factories like Hyundai Motor Group ($1.8 billion) and Rivian ($1.5 billion).
LeRoy questioned why Georgia is willing to financially incentivize more job creation when unemployment remains near record-lows.
“The vast majority of job takers will be people coming from elsewhere, even people moving into the labor market,” LeRoy said.
He also said it’ll be nearly impossible for each new Freyr employee to generate enough local spending and tax revenue to justify the incentives averaging roughly $490,000 per job.
Future growth
Freyr was founded in 2018 and is also building a plant in Norway. Its energy storage systems use lithium-ion batteries to store electricity from renewable forms of energy, such as wind and solar. Freyr, publicly traded since last year, reported a $93.9 million net loss in the third quarter.
The company and project are supported by Koch Industries, a company better known for fossil fuels and leaders who have funded groups that questioned climate change. But Koch has emerged as a major player in battery technology, and the project will benefit from incentives in President Joe Biden’s signature climate bill, the Inflation Reduction Act.
The 870,000-square-foot facility is expected to open in 2026, according to the incentives package. Freyr’s first phase will focus on initial battery cell production, and a second phase of cell production is expected to be ready by 2029.
Wilson, Georgia’s top recruiter, said Freyr will attract companies that produce battery parts such as cathodes and anthodes.
“This gives us a great opportunity to go recruit those pieces as well,” he said.
On Wednesday, Qcells confirmed a $2.5 billion expansion of Georgia production in what the company and federal and state officials said was the largest ever investment in clean energy manufacturing in U.S. history.
Freyr incentives
Total value: $358.5 million*†
- $228 million in local property tax breaks over 20 years
- $90 million tax exemption on machinery and construction materials
- $20 million in local quality job creation grant
- $11 million in state quality job creation credits
- $7 million in Regional Economic Business Assistance (REBA) grants
- $3.3 million in Georgia Quick Start
*Values are rounded
†Total value does not include certain incentives that are based on future potential expenditures
© 2023 The Atlanta Journal-Constitution. Distributed by Tribune Content Agency, LLC.
