Northvolt files for bankruptcy in Sweden – what now for its $7B Canada EV battery plant?

Northvolt AB today announced that it has filed for bankruptcy in Sweden. It says Northvolt North America is solvent, but what will happen to its massive EV battery plant project in Canada?

Northvolt AB, which is Northvolt North America’s parent company, said in a statement that it “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.” It also stated that it faced significant internal challenges in its production ramp-up, and was ultimately unsuccessful in securing a “viable financial and operational future for the company.” (As an aside, Northvolt Germany is also still solvent.)

Northvolt North America first announced plans in September 2023 to build Northvolt Six, a new EV battery gigafactory roughly 15 miles (25 km) east of Montreal. Northvolt Six will include a cell production plant, battery recycling, and cathode active-material production facilities, with the factory running entirely on hydroelectric power. The plan was to bring the plant online in 2026, delivering an initial annual production capacity of 30 GWh.

The project has hefty government financial backing, with Quebec’s government contributing CAD $2.9 billion and the Canadian federal government contributing CAD $4.4 billion.

So what does the future hold for Northvolt Six in light of Northvolt’s bankruptcy in Sweden? In a word: Unclear.

The Canadian Press via the Montreal Gazette reports that Northvolt North America says it will honor its obligations toward its employees. However:

Spokeswoman Emmanuelle Rouillard-Moreau would not confirm when asked if construction on the project will move ahead as part of Northvolt North America’s commitment to honour obligations. She says any decisions regarding the subsidiary ‘will be made by the court-appointed trustee of Northvolt AB, together with the group’s lenders, at the appropriate time.’

Unsurprisingly, Rouillard-Moreau has stuck to the bankruptcy announcement script word-for-word (it’s in paragraph six). They simply don’t know yet. As soon as we find out more, I’ll update this story.

Read more: Northvolt files for bankruptcy, CEO quits

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