Microvast vs. FREYR: Which Battery Stock Holds the Power?

Core Insights - The rise of SPACs in 2020 and 2021 significantly impacted the electric vehicle (EV) industry, with many companies going public through this method [1] - Microvast Holdings Inc. and FREYR Battery SA are two notable companies in the EV supply chain, specifically in battery production, but both have underperformed compared to the S&P 500 since 2021 [2] Company Overview: Microvast Holdings Inc. - Microvast specializes in designing, developing, and manufacturing lithium-ion battery solutions, with a focus on commercial transportation, heavy equipment, and energy storage [3] - The company holds over 630 patents and manages its entire development process from R&D to manufacturing [4] - In Q2 2024, Microvast reported a record revenue of $84 million, a 12% increase year-over-year, but fell short of analysts' expectations of$ 87.5 million [5] - The company reported a negative earnings per share (EPS) of 21 cents, worse than the expected negative one cent [5] - Microvast has suspended construction of its factory in Clarksville, Tennessee, due to financing issues, which is expected to create 290 jobs once operational [6] - Following the earnings report and construction news, Microvast's stock reached a 52-week low of around 31 cents [7] Company Overview: FREYR Battery SA - FREYR Battery is focused on creating industrial-scale clean energy battery solutions for energy storage, EV, and marine applications [7] - The company is currently unprofitable and generating little to no revenue, with plans to build its first gigafactory still years away [8] - FREYR reported having $222 million in cash and no debt, projecting a cash runway into 2026 and forecasting first revenue in 2025 [9] - Despite a slight recovery after its earnings report, FREYR's stock is down about 35% in 2024 and trading near its 52-week low [9] Market Context - The global lithium-ion battery market is facing an oversupply issue, which is expected to resolve over the next year [10] - The renewable energy transition is slowing but continues, presenting potential growth opportunities for both Microvast and FREYR [10] Investment Considerations - Microvast is seen as a more favorable investment due to its focus on energy storage solutions, which are expected to be in high demand, particularly with the expansion of data centers [11] - Analysts have set a consensus price target of$ 4.50 for Microvast, which is over 1,350% higher than its recent price [12]