Quebec Ends Support for Northvolt’s EV Battery Factory, Loses $270M

Quebec’s government is stopping funds for a proposed Northvolt electric vehicle (EV) battery mega factory in the Montérégie region near Montreal.

According to Quebec’s Economy Minister Christine Fréchette, the decision was made after Northvolt Batteries North America didn’t provide an acceptable plan for the Northvolt Six plant, which was scheduled to begin producing batteries next year and ramping up to making enough for one million EVs per year.

Quebec has spent $510 million in total on the project so far, but lost the $270 million it had invested in Northvolt’s Swedish parent company, Northvolt AB, when the company went bankrupt in March. The province also hopes to get back $240 million in a loan given to Northvolt’s local subsidiary to purchase property for the factory.

In addition to these losses, Quebec’s pension fund manager La Caisse said in March it had lost $200 million after investing in Northvolt AB.

Ottawa and Quebec had unsuccessfully sought a buyer for the new battery plant. U.S.-based chemical and battery company Lyten said it planned to buy the proposed $7 billion lithium-ion battery project in Montérégie earlier this month, after having already acquired Northvolt’s assets in Europe and North America, but a potential deal fell through.

Lyten met with Quebec officials in July and August, but a government spokesperson said the company was seeking additional public funding. Quebec refused the proposal, with the spokesperson saying Lyten made unspecified “disproportionate demands.”

Lyten’s chief marketing officer Keith Norman said his company accepts Quebec’s decision and, “if given the opportunity, we would be happy to work with the Quebec government to develop the site.”

As for Northvolt Batteries North America, it said Quebec’s decision is “regrettable” while noting it has not gone bankrupt, contrary to its parent company. The company said in a statement it still has “solid financial resources to relaunch the project.” Northvolt North America has been backed by French multinational bank Société Générale.

Aside from Quebec financial support, Ottawa had pledged to provide up to $1.34 billion in capital commitment to the battery factory project. Industry Canada told The Epoch Times in March that “no support in any form has been disbursed to the company by the Government of Canada.” The promised federal funds were a conditional commitment tied to milestones in project completion.

At the time of its initial funding announcement in 2023, the Prime Minister’s Office said the project would be fully operational five to nine years after launching, create tens of thousands of jobs, and generate $1.6 billion in per year for Canada’s GDP. At the time, Quebec Premier François Legault called the Northvolt project “the largest private investment in Quebec’s recent history,” adding, “We are not simply going to export our natural resources as we did in the past—we are going to process them here.”

Although Minister Fréchette said Quebec’s investment in backing the project has failed, she added that Quebec’s battery industry still has major potential.

“This venture has proved unsuccessful, and we are obviously disappointed. However, the outcome of the project does not mean the end of the battery industry here,” she said. “We remain convinced that it has a bright future, particularly in Bécancour, where nearly 3,000 people are working on the construction of the plants.”

Quebec says it plans to apply via the Superior Court to get back “as much as possible” of the $240 million loaned to Northvolt, which has accrued $20 million in interest and now amounts to approximately $260 million.

The Canadian Press contributed to this report.