Northvolt declares bankruptcy in Sweden, raising questions about the future of large-scale Quebec battery plants
Swedish battery maker Northvolt plans to build a $7 billion factory in Quebec and has declared bankruptcy in Sweden.
The company said at a media conference that the decision to declare bankruptcy was in “an exhaustive effort to explore all available means to ensure the company’s viable financial and operational future.”
Northvolt “has experienced a complex series of challenges in recent months that have eroded its financial situation, including rising capital costs, geopolitical instability, subsequent supply chain disruptions and shifts in market demand.”
The company said its North American business is solvent.
The company said now, court-appointed trustees will determine the future of Northvolt’s business and assets, including technology and production facilities.
It is unclear how the company’s bankruptcy will affect the future of the $7 billion electric vehicle battery factory Northvolt, which is being built in the Montérégie area on the south coast of Montreal.
In 2023, the Quebec government promised $2.9 billion in financing to ensure North Vot. Ottawa has pledged to build the plant, plus other $3 billion worth of incentives.
So far, Quebec government has invested $270 million In the project and provincial pension investors, Quebec (CDPQ) also invested $200 million.
Quebec’s Minister of Economy Christine Fréchette said in an article on X that the government was disappointed by the situation but said they were evaluating their choices. She had previously said Northvolt’s bankruptcy filing would not have an impact on the Quebec battery factory.
“Our desire is that controllers will begin to look for a buyer who will invest in taking over all North American activities and restart the Montérégie project,” she wrote.
Although the parent company of Swedish company’s subsidiary North Volt North American North Volt North America was in bankrupt, it said in a media release that it is still solvency and intends to fulfill its obligations and fulfill its financial commitments.
The Swedish government said it could step in to support the company.
