The province is making a total investment in the company of $1.37-billion for the first phase of Northvolt’s new $7-billion lithium-ion battery factory just outside Montreal in Saint-Basile-le-Grand, according to information obtained by The Globe and Mail ahead of a formal announcement.The bulk of the financing package consists of partly forgivable loans, with the balance being equity in the company. For its part, the federal government is lending the company $1.34-billion.
Northvolt is taking over a site stretching over 170 hectares, roughly equivalent to 140 soccer fields under the rules of the sport’s international governing body. The company says the plant will have 60 gigawatt hours of annual battery cell production capacity, with adjacent facilities for battery recyling and cathode active material making. It is aiming to start construction this year and start operations in 2026.
Northvolt considered sites in the United States but chose Quebec chiefly because of its renewable energy and access to natural resources, Mr. Cerruti said. He said the company plans to source much of the lithium and other raw materials needed locally, giving Quebec and Canada a chance to benefit more fully from the transformation of metals being pulled out of the ground and move beyond its historic role as an exporter of ore.
Still, providing this level of public funding to a company in its early development carries risk. The Sweden plant isn’t yet at full capacity and the company has yet to prove that it can produce consistently on a large volume basis. A handful of other factories in Europe are also in the works. “Basically, it’s a calculated risk,” for the federal and Quebec governments to support Northvolt and other major players, said Yan Cimon, a specialist in corporate strategy and governance at Quebec City’s Laval University.