Northvolt Expands to the True North

A battery company is looking to Canada to prove Sweden has more to export than meatballs, hockey players, and midsummer parties.

What happened: Stockholm-based battery manufacturer Northvolt is close to sealing a $7 billion deal to build an electric-vehicle battery plant in Canada.

• The plant will include a cathode factory, battery cell assembly line, and a battery recycling facility, and will be built in Saint-Basile-le-Grand, just 25 kilometers east of Montreal.

About Northvolt: The company makes its cells using locally sourced, fossil-free energy and predicts by 2030, their green batteries will be made from 50 percent recycled materials and with 80 percent less carbon dioxide than cells made using coal power.

• Northvolt was founded seven years ago by former Tesla executives and the company has already secured more than $55 billion in contracts, including partnerships with Volvo Group, BMW, and Volkswagen.

Why it matters: Sealing the deal would allow Canada to secure a portion of the North American electric-vehicle supply chain, but at a substantial cost to the public. It’s expected both the Canadian and Quebec governments will provide subsidies to help secure the plant. 

• Canada has long been green with envy over the incentives companies receive under the Inflation Reduction Act for building their manufacturing facilities in the US. This multibillion-dollar deal hopes to match those incentives and prove that Canada is worth investing in.

The plant would be one of the largest private-sector investments ever made in Quebec.

Why Canada? Other than a mutual love UV lamps during dark and snowy winters, building a green battery facility in Quebec would allow Northvolt to use the province’s clean and low-cost hydropower. 

Zoom out: Northvolt is still assessing several plant sites across North America and has made no final investment decisions.

As Canada continues the path towards net-zero emissions by 2050, energy alternatives can be attractive investments, however Canada must prove it is worth investing in.