Northvolt declares bankruptcy in Sweden, raising questions about future of massive Quebec battery plant
Northvolt, the Swedish battery manufacturer with plans to build a $7-billion factory in Quebec, has declared bankruptcy in Sweden.
The company said in a media release that the decision to declare bankruptcy was taken after "an exhaustive effort to explore all available means to secure a viable financial and operational future for the company."
Northvolt has "experienced a series of compounding challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demand," the release says.
The company says its North American operations are solvent.
Now, a court-appointed trustee will determine the future of Northvolt's businesses and assets, including technology and production facilities, the company said.
It was not immediately clear how the company's bankruptcy would affect the future of massive $7-billion electric vehicle battery plant Northvolt is building in the Montérégie region on Montreal's South Shore.
In 2023, the Quebec government pledged $2.9 billion in financing to secure the deal with Northvolt. Ottawa committed up to $1.34 billion to build the plant and another $3 billion worth of other incentives.
So far, the Quebec government has invested $270 million in the project and the provincial pension investor, the Caisse de dépôt et placement du Québec (CDPQ), has also invested $200 million.
Quebec Economy Minister Christine Fréchette said in a post on X that the government was disappointed in the situation, but said they were evaluating their options. She has previously said Northvolt's bankruptcy filings won't have an impact on the Quebec battery plant.
"Our wish is that the controller will start looking for a buyer who will invest to take over all North American activities and relaunch the Montérégie project," she wrote.
Despite the bankruptcy of Northvolt's parent company in Sweden, Northvolt North America, a subsidiary of the Swedish company, said in a media release that it remains solvent and intends to honour its obligations and meet its financial commitments.
The Swedish government has indicated that it could step in to support the company.
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