Sweden-based battery cell maker Northvolt committed $7 billion Sept. 28 to build its first North American battery manufacturing site in Quebec.
Company CEO Peter Carlsson joined Canadian Prime Minister Justin Trudeau, Quebec Premier François Legault and other top government officials to confirm a site just east of Montreal straddling McMasterville and Saint-Basile-le-Grand Que., as the location of the widely rumoured, vertically integrated plant.
It won out over stiff competition, Carlsson told reporters.
“We were looking at almost every state in [the] United States, but we couldn’t help glancing at Quebec. It was like, we found the grid, we found the raw materials supply, we found a really, really attractive city in Montreal.”
The company did not point directly to what automakers the new cell plant will supply, but Carlsson said Northvolt has booked US$55 billion in global orders from Audi, BMW, Porsche, Volvo and truck maker Scania.
“It’s also those customers that we’re also bringing from Europe over here as we’re establishing this facility in Montreal.”
Northvolt co-founder Paolo Cerruti added that the company’s “anchor customer” for the plant is likely to be disclosed in “the coming weeks.”
The Northvolt campus, which will include a cell production plant and precursor steps such as cathode active material production and battery recycling at adjacent facilities, will cover 420 acres (170 hectares). In its first phase, it will have capacity to produce 30 GWh of battery cells each year, while an expected expansion will double output to 60 GWh annually, enough to power roughly one million electric vehicles.
BILLIONS IN GOVERNMENT MONEY
The federal and Quebec governments said the $7 billion investment marks a new high-water mark for private projects in the province. It also caps a string of battery supply chain spending in Quebec over the past 18 months, adding cell production to a long list of mining and material processing sites planned, under construction or already in production across the province.
Both the federal and Quebec governments pledged considerable upfront and longer-term tax incentive spending to secure the project.
Ottawa committed $1.34 billion toward capital expenditures, while Quebec will spend $1.37 billion.
François-Philippe Champagne, Canada’s minister of innovation, science and industry said the announcement of the plant is the “culmination of our desire to attract the world’s biggest players.”
“Northvolt’s decision to pick Quebec to establish their project, amongst more than 70 sites, is a strong vote of confidence in the EV ecosystem we are currently building in Quebec, and all around Canada,” he said in a release.
“It also speaks volumes of our country’s competitiveness when it comes to attracting major investments.”
As with other battery cell plants planned in Ontario, the federal and provincial governments will match cell production tax incentives worth US $35 per kWh offered under the U.S. Inflation Reduction Act. Ottawa estimates the subsidies will cost a total of C $4.6 billion through 2032, with one-third of the cost carried by the province.
Construction on the new battery plant, officially dubbed Northvolt Six, is expected to start next year, with early site preparation beginning this fall. The facility is scheduled to produce its first cells in 2026, ramping up to full production by 2028.
Flavio Volpe, head of the Automotive Parts Manufacturers' Association, praised the announce in a post on X.
