Morgan Stanley downgrade FREYR Battery (NYSE:FREY) to an Equal-weight rating and slashed its price target on the electric vehicle stock by 50% to $13 due to execution risk seen for the year ahead.

Analyst Adam Jonas said it has been more than enough of the conditional off-takes and it is time for the battery manufacturing company to make cells before the financing can flow.

“We continue to believe that Norway offers unique competitive advantages and that the Sovereign has an interest in supporting a strong domestic battery player for long term success. That said, we view 2023 as a year where many EV/Battery-related companies are moving from business plan to hard manufacturing – and where execution risk is rising and the need for financing is existential.”

Morgan Stanley anticipated more significant funding in calendar 2022 for Luxembourg-based FREYR and thus forecasts substantial negative cash flow in the next few years. Still, FREY stock is called high risk-high reward for investors willing to bet the company can achieve a level a commercial viability that most other EV de-SPACs have been unable to achieve.

SHhares of FREYR Battery (FREY) were down 5.66% in premarket trading on Wednesday.

Electric vehicle sector watch: Read the Tesla earnings preview.