KORE Power, Inc. has closed the initial $75 million tranche of a private placement (the “Financing”) anticipated to total $150 million. Siemens Financial Services was the lead investor and was joined by Quanta Services with additional strategic partners including Nidec Motor Corporation, Honeywell Ventures, Trog Hawley Capital and a leading utility scale energy storage provider. Goldman Sachs & Co. LLC acted as KORE’s Exclusive Placement Agent.
KORE is a leading U.S.-based developer of lithium-ion battery cells and manufacturer of integrated solutions for the e-mobility and energy storage sectors. KORE intends to use the proceeds of the Financing to commence the construction of its KOREPlex gigafactory in the Phoenix area and to purchase long lead-time items required for construction of the facility. The KOREPlex is expected to have initial annual production capacity of 6 GWh of high-density lithium-ion cells. Production is expected to expand to 12 GWh and beyond to meet expected market demand. The KOREPlex will also be among the first U.S. battery cell gigafactory built independently of an automotive OEM. This independence will allow the KOREPlex to supply batteries to a wide range of innovative e-mobility and energy storage customers. KORE will break ground on the KOREPlex this year, with initial output beginning in late 2024.
“Siemens Financial Services is proud to be the lead investor committed to backing KORE with both our capital and know-how. We support the industries and create the infrastructure forming the backbone of the American economy and apply that same commitment to the development of the battery industry in the U.S.,” said Steffen Grosse, CEO of Equity Finance, Siemens Financial Services. “KORE’s focus on manufacturing and vital industries such as energy storage, transportation electrification and grid modernization align with the strategic direction of SFS’ investments in the U.S. to date.”
Earlier this year, BloombergNEF forecast “a 30% compound annual growth rate in the energy storage market. Similarly, electrification in the mobility sector, which includes electric vehicles and charging infrastructure, is experiencing rapid growth. According to BloombergNEF, as of July, global electric vehicle sales were up more than 60% year-over-year”.
Demand for KORE’s domestically manufactured batteries is expected to further increase due to the domestic content required to fully maximize the energy storage investment tax credit available under the recently passed Inflation Reduction Act.
“Strengthening domestic manufacturing capabilities for battery cells will be critical to the transformation and build out of energy infrastructure in the United States,” said Andrew Schwaitzberg, leader of energy transition initiatives at Quanta Services. “We are excited to invest and partner alongside leading energy innovators who also understand the importance of building and supporting a robust domestic supply chain. We expect our strategic alliance with KORE to enhance Quanta’s ability to deliver comprehensive energy solutions in partnership with our customers.”
Since last year’s announcement that the KOREPlex would be built in Arizona, KORE has announced a series of agreements to secure U.S. supply of materials used in battery cell manufacturing. KORE has also launched a vertically integrated energy storage solutions provider based in Vermont known as KORE Solutions.
“As a U.S.-based manufacturer with the ability to supply top-tier lithium-ion cells, the KOREPlex will take us to the next level. We will have American workers and an American supply chain driving the growth of clean energy and vehicle electrification,” said Lindsay Gorrill, CEO and Co-Founder of KORE Power. “In the coming months, we expect to announce additional agreements demonstrating our commitment to building a domestic supply chain for the KOREPlex and embracing a circular lifecycle for our products.”