When it comes to opening a new electric vehicle battery plant in Québec, Sweden’s Northvolt has more to worry about than protestors with Molotov cocktails.
What happened: The Swedish battery maker is re-evaluating its aggressive international expansion plans after a flurry of setbacks. The company said that it’s continuing construction on the $7 billion plant in Québec “at this time,” but the plant could face delays after the review.
- The federal and provincial governments agreed to invest a combined $2.7 billion in the plant, hoping it would produce batteries for up to a million EVs a year.
Why it’s happening: Northvolt may have bitten off more than it can chew. Its first Swedish factory has failed to live up to its promised production capabilities. The company recently lost a US$2 billion contract with BMW because of its failure to make deliveries on time.
- The company also faces a workplace safety probe and is burning through cash. It posted a $1.03 billion operating loss in 2023, nearly tripling from the year before.
Why it matters: It’s not just Northvolt getting spooked. A bushel of companies like Ford and Umicore are taking a second look at their EV battery biz, which is worrisome for a country like Canada that has pumped billions into the sector over the past two-ish years.—QH