In September 2023, Prime Minister Justin Trudeau and Quebec Premier François Legault unveiled a significant collaboration with Northvolt executives, announcing plans for a groundbreaking project in Montreal. This initiative, known as Northvolt Six, aimed to establish a mega-factory on Montreal’s South Shore dedicated to producing electric vehicle batteries. The project was anticipated to generate 3,000 employment opportunities and inject over $1 billion into the economy.
Both the federal and provincial governments displayed enthusiastic support for Northvolt, a Swedish corporation, in their endeavors to persuade the company to select Quebec for its inaugural large-scale plant outside of Europe. Canada and Quebec pledged substantial financial contributions, including direct investments and various incentive schemes, to facilitate the realization of the venture. Quebec also streamlined its environmental assessment regulations to expedite the approval process for the plant.
Initially scheduled to commence battery production in 2026, the project has now come to a standstill. Quebec recently declared a halt in further financial backing for the battery plant. Several factors contributed to this outcome, beginning at the project’s inception.
Northvolt, established in 2016 in Stockholm, Sweden, by former Tesla Motors executives, positioned itself as a pioneer in sustainable battery manufacturing, primarily focusing on electric vehicle batteries. The company attracted substantial investments from prominent entities such as the European Investment Bank, Goldman Sachs, BMW AG, and Volkswagen Group. By 2023, Northvolt had commenced battery deliveries at its Skellefteå plant and employed 5,000 individuals across its global facilities.
However, cracks in the company’s foundation began to surface in December 2023 when Swedish media reported significant losses and diminished battery production levels. In 2024, Northvolt disclosed an operational deficit of $1.4 billion and initiated workforce reductions, predominantly at the Skellefteå factory. The company also halted or abandoned several expansion projects, including advancements in battery technology and recycling methods. Additionally, BMW AG retracted a $2.9 billion battery order due to quality apprehensions.
Despite Northvolt’s assurances that the layoffs would not impact the Quebec project, challenges arose in the province. Environmental groups contested the plant’s construction, citing environmental harm to wetlands and crucial tree removal. Furthermore, Quebec faced criticism for bypassing certain environmental assessments, such as a review by the Bureau d’audiences publiques sur l’environnement, which Northvolt claimed would have substantially delayed the project.
Ultimately, Northvolt encountered financial turmoil, filing for bankruptcy protection in the United States in November 2024 and subsequently in Sweden in March 2025. This insolvency rendered Quebec’s investment in Northvolt essentially worthless, prompting the government to withdraw its funding commitments for the factory. Despite Northvolt North America asserting the solvency of its North American operations, the Quebec government terminated its involvement in the project.
Quebec anticipates recovering $260 million of the $270 million invested in Northvolt, including funds spent on the factory land. A judge recently declared Northvolt North America insolvent, resulting in the company’s complete employee layoff. In a Radio-Canada interview, Quebec’s economy minister, Christine Fréchette, reflected on the company’s missteps, citing overextension into multiple products and advising a focus on a single core activity for young enterprises.