What happened
Shares of Freyr Battery (FREY -3.12%) are tumbling 9.5% as of 11:27 a.m. ET on Friday as the stock market sell-off gathers speed.
Fears of a hard landing are growing after the Federal Reserve raised interest rates by 75 basis points for the third consecutive time, hiking them to 3.25% for the first time since 2007. The Fed said it expected its target policy rate to hit or exceed 4.25% this year, and it could exceed 4.5% next year.
Image source: Getty Images.
So what
Freyr Battery is an electric vehicle (EV) lithium-ion battery start-up that is hoping to go live with production beginning next year. It anticipates having a customer qualification plant, or a full-size production line to test out designs and products, online by the end of the year.
Wall Street has been exceptionally bullish about Freyr's potential in becoming a significant battery industry player. Morgan Stanley recently set a Street-high target price of $26 per share, which implied a 100% gain from where the stock had been trading. The stock had soared as high as $16.57 per share, up 157% from its low point back in June.
Now what
The lithium-ion battery market is a crowded one, but Freyr Battery's technology promises to be an innovative semisolid design bringing efficiencies in speed and cost. Freyr licenses the technology from privately held 24M.
Although the battery maker has signed a number of contracts with partners to bring its factories online, as well as help with sales of its batteries, fears of a recession could hurt demand for EVs while rising interest rates could significantly raise financing costs.
