Quebec's hydro power and critical minerals saved Northvolt's Canadian plant
The company’s Canadian operations, as a result, “will continue to operate as usual, outside of the Chapter 11 process,” the spokesperson wrote.
Quebec’s abundant hydropower and critical mineral resources played a crucial role in sustaining the construction of a $7 billion battery factory by Sweden's Northvolt in Montérégie, despite the company filing for U.S. bankruptcy protection. The Northvolt Six gigafactory, designed to produce lithium-ion batteries for one million electric vehicles annually, remains central to the company’s future plans.
Northvolt, which filed for Chapter 11 bankruptcy to reorganize debts of nearly $6 billion, emphasized that its Canadian operations are independently financed and will continue unaffected. A spokesperson stated that Quebec was originally selected due to its clean hydroelectric energy, skilled workforce, and access to critical minerals—factors that remain unchanged.
Despite the financial setbacks, the company has confirmed the project will proceed with an adjusted timeline. Construction of the gigafactory is advancing steadily, with earthworks expected to conclude by year’s end and foundation pouring scheduled for spring. Contracts worth $200 million have already been signed with Quebec-based suppliers.
The Canadian and Quebec governments had committed $1 billion each for the factory’s initial phase, although Northvolt stated it would not seek emergency government funding. The spokesperson expressed gratitude for existing support, adding that the restructuring process under Chapter 11 will allow the company to secure new funding while scaling operations to meet current market demands.
The battery sector globally has faced significant challenges, including declining demand in the electric vehicle market and intense competition from Chinese and South Korean manufacturers offering lower-cost technologies. Moe Kabbara, vice president of the Transition Accelerator think tank, highlighted that Northvolt's difficulties mirror broader challenges in the industry, with over 600 gigawatt-hours of planned battery capacity in Europe recently delayed or canceled. He called for North America to strengthen its battery ecosystem to compete with China and bolster the resilience of the shared North American auto sector.
The Chapter 11 filing also led to the resignation of Northvolt CEO Peter Carlsson, who co-founded the company in 2016. Carlsson will remain involved as a senior advisor and board member.
Canada’s federal government has made developing a domestic battery ecosystem a cornerstone of its energy policy, investing over $56 billion in tax incentives and support for battery companies and automakers. Northvolt’s Canadian gigafactory is part of this vision, as one of two such facilities the company is building globally, with the second located in Germany.
