Swedish battery manufacturer Northvolt, which had plans to build a $7-billion factory in Quebec, has declared bankruptcy in Sweden.
In a media release, the company stated that the decision came after “an exhaustive effort to explore all available means to secure a viable financial and operational future for the company.” Northvolt cited rising capital costs, geopolitical instability, supply chain disruptions, and market demand shifts as key factors contributing to its financial troubles.
Despite the parent company’s bankruptcy, Northvolt confirmed that its North American operations remain solvent. A court-appointed trustee will now determine the fate of the company’s assets, including its technology and production facilities.
The impact of this bankruptcy on Northvolt’s planned $7-billion EV battery plant in Montérégie, on Montreal’s South Shore, remains unclear. The Quebec government had pledged $2.9 billion in financing for the project, while Ottawa committed up to $1.34 billion in direct funding and another $3 billion in incentives. So far, Quebec has invested $270 million, and the Caisse de dépôt et placement du Québec (CDPQ) has contributed $200 million.
Quebec Economy Minister Christine Fréchette expressed disappointment over the situation, stating that the government is evaluating its options. She reassured that Northvolt’s bankruptcy should not impact the Quebec battery plant, adding that the priority is finding a buyer to take over North American operations and relaunch the Montérégie project.
Northvolt North America reiterated its commitment to fulfilling financial obligations despite its Swedish parent company’s insolvency. Meanwhile, the Swedish government has indicated it may step in to support the company.
Source: Swifteradio.com
