ATLANTA, Georgia: A clean energy company has scrapped plans to build a US$2.6 billion battery factory in Newnan, Georgia, opting instead to focus on solar panel manufacturing in Texas.

Freyr Battery, which initially announced the Georgia project in 2023, informed local officials last week that it would not proceed with construction. The facility was expected to hire over 700 workers and manufacture batteries for storing renewable energy. However, the company never broke ground on the 368-acre (149-hectare) site.

Freyr, a Norwegian-founded startup, moved its headquarters to the U.S. to maximize tax benefits from President Joe Biden's climate law. But instead of expanding its battery operations, it purchased a $340 million solar panel factory in Texas from China's Trina Solar last year.

"We are so grateful for the support and partnership we found in Coweta County and throughout Georgia," Freyr spokesperson Amy Jaick said in a statement. "However, as noted in our December release, we are focusing at the moment on the solar module manufacturing facility in Texas."

Freyr's decision to pivot was influenced by rising interest rates, declining battery prices, leadership changes, and a shift in company goals, according to Coweta County Development Authority President Sarah Jacobs.

The Georgia Department of Economic Development had previously granted $7 million to assist Freyr in securing land for the project.

Department spokesperson Jessica Atwell stated that Georgia and Freyr are working together to ensure the grant funds are repaid quickly. The company may also owe additional funds to Coweta County.

"Georgia's incentives process protects the Georgia taxpayer, and when a company's plans change, that process ensures discretionary incentives are repaid," Atwell said.

Freyr had initially planned to build battery factories in Norway and Finland, but in November, it announced plans to sell its European business. The company also terminated its battery technology license, paying $3 million in settlement fees.

Freyr's former CEO, Tom Einar Jensen, previously warned investors that Chinese manufacturers were producing batteries at lower costs, making it difficult for startups to secure funding. The company's cash reserves fell from $253 million at the end of 2023 to $182 million by September 30.

Despite Freyr's withdrawal, Georgia remains a significant hub for EV and battery manufacturing.

• SK Innovation invested $2.6 billion in a battery plant in Commerce, though it later furloughed some workers.
• Hyundai Motor Group has begun production at its $7.6 billion electric vehicle and battery facility near Savannah and expects to hire 8,500 workers.
• Electric truck maker Rivian revived its $5 billion factory project near Atlanta after securing a $6.6 billion federal loan.

While Freyr's exit marks a setback, state officials remain confident in Georgia's position as a leader in clean energy manufacturing.