Northvolt gets billions from Canada to build Quebec EV battery plant
, Bloomberg News
Sweden’s Northvolt AB said clean power and access to critical raw materials alongside generous subsidies swayed its decision to pick a site close to Montreal for its first electric vehicle battery plant in North America.
The $7 billion project sets up Northvolt, founded by former Tesla Inc. employees, to become a global player as Western nations seek to lessen EV battery dependence on China. It’s set to start operating in 2026 and initially produce enough batteries for about half a million EVs. The plant was announced Thursday, confirming a report in June by Bloomberg News.
To help attract Northvolt, Canadian Prime Minister Justin Trudeau’s government is matching subsidies available for U.S. manufacturing under the Inflation Reduction Act. The support during construction as well as battery production may amount to more than $5 billion, and follows similar commitments for Volkswagen AG and Stellantis NV factories in Ontario.
“It will make our country one of the few places with this capacity outside of Asia,” said Trudeau at a news conference in Montreal.
Quebec’s clean hydroelectric power will “slash by half the total footprint of the carbon dioxide required to produce batteries,” co-founder Paolo Cerruti said in an interview. Canada’s reserves of critical minerals and Montreal’s location on the eastern side of the continent were also factors in the company’s choice — alongside generous funds.
The moves are a testament to the growing global subsidy race. Tensions between China and Western countries have spiked, with EVs moving into the crosshairs after the European Union this month kicked off a probe into what it says is unfair Chinese state support of its electric-vehicle makers.
In a first phase, Northvolt’s Montreal factory will have a capacity of 30 gigawatt hours of annual lithium-ion cell manufacturing and will also produce cathode components and recycle old batteries. No timeline was provided for a second phase that would double output.
Government funding will amount to about $1 billion each from Canada and Quebec toward construction, mostly in loans that may be partially forgiven if Northvolt meets certain conditions. As part of its share, Quebec is buying a $420 million equity stake in Northvolt.
The company will also be eligible for combined operating subsidies of as much as $4.6 billion over a maximum period of nine years, broadly matching commitments for the VW and Stellantis projects in Ontario. Northvolt chose the location east of Montreal from about 70 different sites in North America.
“This is the largest manufacturing investment in the history of Quebec,” said the province’s premier, Francois Legault.
Cerruti, who previously led the supply chain and operations planning at Tesla, will lead Northvolt’s North American operations. The battery maker, created seven years ago, has already received $55 billion in orders from BMW, Volvo Car and Volkswagen.
It’s currently making batteries in Sweden and plans an initial public offering when equity markets are more favorable, counting BlackRock Inc. is among its large investors. The firm is also planning to build a factory in Germany, but financial support has yet to be finalized.
Northvolt has already secured a battery buyer in North America for the new plant, Cerruti said, without disclosing any details. Future expansion on the continent is possible, he said.
The ambitious timeline for the project may come under pressure from a labor shortage with around 3,000 workers necessary and opposition from residents living nearby.
“It’s not going to be easy, but being aware and having a plan is kind of solving 50 per cent of the problem,” Cerruti said.
With assistance from Laura Dhillon Kane.
Quebec EV battery plant will produce $25
billion worth of batteries each year: Volpe
, BNN Bloomberg
A $7-billion electric vehicle battery plant is coming to Quebec, and one industry expert says it will be able to produce around $25 billion worth of batteries each year when fully built out.
The president of the Automotive Parts Manufacturers’ Association told BNN Bloomberg that the investment by Swedish battery-maker Northvolt is an important link in EV battery supply chain infrastructure, which will be critical to Canada’s economy going forward.
“This is their first North American investment, and it's massive,” Flavio Volpe said in a television interview on Thursday.
The Quebec government is subsidizing the plant, committing up to $2.9 billion to secure the deal, while the federal government will add up to another $1.34 billion.
Volpe says that as Canada attempts to break into the global EV battery market, government subsidies are necessary to attract investment from the world’s largest companies.
“If you want to be in the big leagues, you've got to, unfortunately, pay a franchise fee,” he said. “But then it generates all kinds of incredible activity that doesn't come any other way.”
Volpe says that when fully operational, the plant will have the capacity to make roughly one million batteries per year.
“They're about $25,000 each battery, so the economic activity in the area is going to be in and around $25 billion a year,” he said, “so there is a lot of money tied to production.”
Northvolt’s facility, which will be located outside Montreal, is expected to go into production in 2026 and will employ up to 3,000 people, according to the company.
No comments:
Post a Comment