In September 2023, Prime Minister Justin Trudeau and Quebec Prime Minister François Legault stopped in a Montreal setting together with Northvolt executives and announced what they called a “historical” association: a plan to build a new mega-factory on the southern coast of Montreal.
Northvolt Six should be called, a plant that would produce electric vehicle batteries, would create 3,000 jobs and contribute more than $ 1 billion to the economy.
Both the provincial and federal governments launched the red carpet for Northvolt, a Swedish company, to cut them to choose Quebec for their first factory of the first outside of Europe.
Canada and Quebec said that billions of dollars would commit, both in direct investments and in other incentive programs, to help the project be seen in late, and Quebec changed its own rules on environmental evaluations, which accelerated the approval of the plant.
The batteries were supposed to leave the assembly line in 2026. Instead, the project is dead in the water. Quebec announced this week that I was leaving more funds for the battery plant.
So what went wrong? A lot. Let’s start at the beginning.
In 2023, the provincial government announced an association and an investment of $ 510 billion with a Swedish Startup Northvolt to build an EV battery plant. But only two years later, Quebec took out the plug from the billionaire factory. We broke what went wrong.
A promising company
Northvolt was formally Established in 2016 In Stockholm, Sweden. Founded by two former executives of Tesla Motors, it was promoted as a pioneer of the production of sustainable batteries, with an approach to batteries for electric vehicles.
In its early years, the company attracted billions in investments of large actors, including the European Investment Bank, Goldman Sachs and BMW AG and Volkswagen Group manufacturers.
The company began building its first factory, in Skellefteå, Sweden in 2019, and that same year, it began planning another factory in Germany.
In 2023, when the announcement of the Quebec factory arrived, the company seemed to be fine. He said he was delivering batteries at the Skellefteå plant and used 5,000 employees in their facilities worldwide.
Cracks begin to show
In December 2023, months after the announcement of the Quebec factory, the Swedish media began informing that the company faced billions in losses and low battery production.
In 2024, the company announced an operational loss of $ 1.4 billion and fired 1,600 people, mainly in the Skellefteå factory. Some of his expansion projects were also stopped or discontinued: he had tried to develop advanced battery technology and new battery recycling methods.
The same year, one of its main BMW AG partners expelled from a battery request of $ 2.9 billion due to quality concerns.
The company, and Quebec government officials insisted that the dismissals did not affect the Quebec project, where early work was already underway. Quebec’s Minister of Economy at that time, Pierre Fitzgibbon, even suggested that the interruption of other Northvolt projects could lead to More jobs are created in Quebec.
But things were not going without problems in Quebec either.
The environmental groups presented judicial challenges and protested against the construction of the plant, which said that damaged wetlands and demolished important trees.
The Quebec government also caused controversy to avoid certain environmental evaluations as a review of the Bureau d’Auriences Publica Sur l’enundimnim (BAPE), which Northvolt said that the project would have fatally delayed.
However, the work continued on the site and in a short time, it was clear of trees. But the factory complex never materialized.
Bankruptcy
In November 2024, Northvolt presented for the first time the bankruptcy protection of Chapter 11 in the United States, saying that it lacked cash to continue operating. He secured some funds, sold some assets and reduced his business, but said he would continue to develop battery cells.
Then, in March 2025, Northvolt, the Northvolt North America parent company, responsible for the Quebec project, declared bankruptcy in Sweden.
That suddenly meant the money invested in the company by the Quebec government, and other institutional investors, including the Quebec Public Pension Fund, had no value.
Even so, politicians insisted that the Quebec battery plant remained alive. Northvolt said it was North American operations were solvent.
But behind the scene, Quebec’s new Minister of Economy, Christine Fréchette, said she had given Northvolt North America a deadline of September 1 to present a new Plan for the Quebec site.
A day later, he made the announcement in X, saying in a statement that the Quebec government did not want more part in the Northvolt factory and that it was withdrawing from its financing commitments.
The company will not touch more than billions of dollars in spending commitments announced in 2023.
The groups that raised concerns about the project in the past question what will come later, while the Minister of Economy of the Province argues that there is a significant value in the Earth in their current state.
In a statement, Northvolt North America said that he wanted to underline that their North America operations are not bankrupt and that they still have “substantial resources to relaunch the project.”
“This decision is deeply unfortunate for Northvolt North America, particularly given the significant efforts already made, and still in progress, to identify a buyer, along with the diligent management of our finances,” the statement said.
Quebec seeks to recover $ 260 million
As for the money that Quebec had already committed to the project, its investment of $ 270 million in Northvolt now has no value, but the government has been able to claim almost $ 200 million that it had spent on the earth for the Northvolt factory and still hopes to obtain the land itself.
The province says that the total debt owed is worth $ 260 million with interest.
Finally, a judge declared on the insolvent Friday of Northvolt North America on Friday and the company fired its entire workforce.
In an interview with the Patrice Roy of Radio-Canadá, Fréchette, the Minister of Economy of the Province, gave his evaluation of what went wrong with the company.
“I think the business was involved in too many products. It spread too thin,” he said. “A lesson, too, to take this, probably, it was a young company, under 10 years old, and may have concentrated in a single activity.”
