In September 2023, Prime Minister Justin Trudeau and Quebec Premier François Legault, together with Northvolt executives, revealed a significant collaborative effort to establish a cutting-edge mega-factory named Northvolt Six on Montreal’s South Shore. This initiative aimed to manufacture electric vehicle batteries, generate 3,000 job opportunities, and inject over $1 billion into the economy.
Both the federal and provincial administrations went to great lengths to attract Northvolt, a Swedish firm, in selecting Quebec for its inaugural major factory outside of Europe. Canada and Quebec pledged billions of dollars in direct investments and other incentives to support the project. Quebec even modified its environmental assessment regulations to expedite the plant’s approval process.
Although the plan originally targeted battery production commencement in 2026, the project has now hit a standstill. Quebec recently declared the discontinuation of further financial support for the battery plant, leaving the venture in limbo.
Various factors contributed to the project’s collapse. Initially, Northvolt, established in Stockholm, Sweden in 2016, garnered substantial investments from prominent entities like the European Investment Bank, Goldman Sachs, BMW AG, and Volkswagen Group due to its commitment to sustainable battery production for electric vehicles. The company had initiated operations in Sweden and Germany before the Quebec project announcement in 2023.
However, cracks began to surface when reports emerged in December 2023 about Northvolt facing significant losses and reduced battery output. Subsequently, in 2024, the company reported a substantial operating loss, laid off 1,600 employees, and halted certain expansion projects, including advanced battery technology and recycling methods. Notably, concerns over quality prompted BMW AG to withdraw a major battery order worth $2.9 billion.
Despite reassurances from Northvolt and Quebec officials that the layoffs wouldn’t impact the Quebec project, challenges arose in the province. Environmental groups contested the plant’s construction, citing damage to wetlands and crucial trees. Furthermore, controversies arose over Quebec bypassing specific environmental evaluations, such as a review by the Bureau d’audiences publiques sur l’environnement.
As Northvolt faced financial turmoil, filing for bankruptcy protection in the U.S. under Chapter 11 in November 2024, and subsequently in Sweden in March 2025, the Quebec project’s future grew uncertain. Despite claims of solvency from Northvolt North America, Quebec’s new economy minister, Christine Fréchette, set a deadline for the company to present a revamped plan for the Quebec site. Ultimately, Quebec decided to withdraw from the project, retracting its funding commitments and leaving the future of the Northvolt factory in doubt.
While Northvolt North America emphasized its operational stability and efforts to revive the project, Quebec aimed to recover its investments. The province managed to reclaim a significant portion of its expenditures related to the land for the factory, with hopes of securing the property entirely. As a Quebec judge declared Northvolt North America insolvent and the company laid off its workforce, Fréchette highlighted the company’s overextension into multiple products as a critical factor in its downfall.