Sweden’s Northvolt to construct $5.2 billion battery manufacturing facility in Quebec

A rendering of Northvolt’s deliberate battery manufacturing facility close to Montreal. (Reuters)

STOCKHOLM/TORONTO — Swedish lithium-ion battery producer Northvolt stated on Thursday it might open a $5.2 billion gigafactory in Quebec, the biggest ever funding within the Canadian province and the most recent in electrical automobile battery manufacturing capability within the nation.

The primary part of the development of the Northvolt Six manufacturing facility simply exterior Montreal will start this 12 months and it’s anticipated to be operational in 2026.

Northvolt will make investments $3.2 billion of the overall with the native and federal authorities every contributing $1 billion, Northvolt Co-Founder Paolo Cerruti advised Reuters.

The primary part will present 30 gigawatt hours (GWh) of manufacturing capability, earlier than finally increasing to 60 GWh with investments approaching $9 billion, stated Cerruti, who will lead the mission as CEO of Northvolt North America.

Northvolt already has a number of European factories and is amongst a handful of gamers constructing a home battery trade to battle off the dominance of Asian producers.

It has raised greater than $9 billion in debt and fairness since 2017 in its bid to develop into Europe’s greatest battery producer, together with $1.2 billion final month from traders together with Canada Pension Plan and Ontario Municipal Workers Retirement System.

“We checked out 70 totally different websites initially of this course of,” Cerruti stated. “We had been additionally taking a look at the US however finally Canada made it for the primary manufacturing facility.”

He pointed to the supply of sustainable power, entry to expert staff, proximity to pure assets and different elements such because the perspective of the governments as causes for the choice.

The $369-billion U.S. Inflation Discount Act (IRA) handed final 12 months has prompted firms together with Northvolt to look throughout the Atlantic, attracted by hefty subsidies and cheaper power.

“IRA took the trade without warning,” Cerruti stated, including Northvolt had determined to place collectively a web site choice crew round a 12 months in the past, accelerating the method earlier in 2023.

Northvolt has greater than $55 billion price of contracts with primarily European prospects reminiscent of BMW, Scania, Volkswagen and Volvo Vehicles.

Cerruti stated the corporate had additionally secured an anchor buyer in North America, however declined to call them.

“This measurement of funding and mission cannot occur if you do not have an anchor buyer,” he stated.