Battery Maker Northvolt Conducts Review of Expansion, Says Quebec Plant Going Ahead as Planned

The entrance to Northvolt, the new EV battery plant being built by the Swedish manufacturer in Saint-Basile-le-Grand, east of Montreal, Que., May 16, 2024. (Christinne Muschi/The Canadian Press)

Swedish electric vehicle battery maker Northvolt is conducting a strategic review of its recent expansion moves, but says construction of its Québec plant will continue as planned.

Ottawa and Quebec announced last September the company would be receiving billions in subsidies as it builds a mega factory on Montreal’s south shore.

The future of the plant was unclear as the company announced a strategic review on July 2 and its CEO said its Canada plan could be affected.

“A strategic review is underway at Northvolt, to be concluded in the autumn, involving evaluation of timelines and capital allocation to ensure we are pursuing the most effective build-out of capacity possible,” Northvolt said in a July 2 statement reported by Reuters. The news agency also quoted the company’s CEO Peter Carlsson saying planned plants in Germany and Montreal could be reconsidered as a result.

The news comes after Northvolt said in June it was reviewing its plan to build a new lithium-ion battery plant in Sweden.

Northvolt also lost a $2 billion euro contract (CA$2.9 billion) from German carmaker BMW last month to supply its electric vehicles after BMW said it couldn’t deliver on time.

A spokesperson for Northvolt North America, however, told The Epoch Times the Québec project is not being halted.

“Our commitment to Quebec and our intentions remain unchanged: Northvolt intends to play a central role in the energy transition by manufacturing the world’s greenest batteries here, and at this time we are proceeding with the construction of our Northvolt Six technology campus as planned,” said Communications Director Laurent Therrien.

Mr. Therrien acknowledged the company is facing “significant pressure” from customers to meet its commitments and added the strategic review will decide on deadlines for completing various projects.

Governments in Canada have invested heavily to bolster the domestic electric vehicle supply chain, in competition with the U.S. for investments.

The deal with Northvolt includes Ottawa and Québec matching production support from the credit contained in the United States’ Inflation Reduction Act, equalling up to US$35 per killowat-hour. This could be up to $4.6 billion, with one third being paid by the province of Quebec.

Industry Minister François-Philippe Champagne has been spearheading the electric vehicle effort, which includes separate deals with Volkswagen, Stellantis-LG Energy Solution, and Honda.

Mr. Champagne’s office said he is aware of Northvolt’s strategic review, which could impact Canada. No further comments were provided.

“Minister Champagne is aware of the recent developments and will continue to work with all partners to foster a strong and sustainable EV sector in Canada,” spokesperson Audrey Milette told The Epoch Times in a statement.

“We are working hard to bring investments to Canada that will see more jobs and more economic growth across the country,” she added, noting that Canada has attracted over $46 billion in investments in the electric vehicle supply chain.

The Quebec government did not respond to a request for comment by publication time.

The investments have not been without controversy. The federal Parliamentary Budget Officer said last September that it would take 20 years to recoup the $28 billion combined investments made in Volkswagen and Stellantis-LG, rather than the five years the government had initially pledged.

Concerns have also been raised about the Stellantis-LG plant in Ontario on the use of workers from South Korea.

Efforts from the Conservatives to study the matter in committee have been voted down by Liberal and NDP MPs.

Northvolt’s installation in Québec has also faced some hurdles, this time not from politicians but from saboteurs.

Nails and metal bars were inserted into trees at the site of the project in January to damage heavy machinery and slow down construction. The action was claimed anonymously online by an anti-capitalist group.

Then in May, unexploded incendiary devices were found under machinery on the site, with a claim made on the same website.

Reuters and The Canadian Press contributed to this report.

Editor’s note: This article has been updated to include comments from Northvolt North America.