In September 2023, a significant partnership was announced in Montreal by Prime Minister Justin Trudeau and Quebec Premier François Legault, along with Northvolt executives. This collaboration aimed to establish a new mega-factory, named Northvolt Six, on Montreal’s South Shore. The factory was set to produce electric vehicle batteries, generate 3,000 jobs, and inject over $1 billion into the economy.
To attract Northvolt, a Swedish company, both the federal and provincial governments offered substantial financial incentives and support, including adjustments to environmental assessment regulations by Quebec. Despite initial projections for battery production to commence in 2026, the project has now been halted. Quebec recently declared the cessation of further funding for the battery plant.
Several factors contributed to the project’s downfall. Initially, Northvolt, founded in Stockholm, Sweden, in 2016, garnered significant investments and partnerships with notable entities such as the European Investment Bank, Goldman Sachs, BMW AG, and Volkswagen Group. The company’s expansion plans included the construction of factories in Sweden and Germany.
However, cracks began to surface in December 2023 when reports emerged of substantial losses and low battery production at Northvolt. By 2024, the company recorded an operating loss of $1.4 billion, leading to layoffs and the discontinuation of certain projects. Additionally, a major partner, BMW AG, withdrew a significant battery order due to quality concerns.
In the midst of these challenges, environmental groups in Quebec raised objections to the construction of the plant, citing environmental damage concerns. Despite these hurdles, construction commenced, but the factory never materialized. Northvolt’s financial troubles escalated, culminating in bankruptcy filings in the United States and Sweden in 2024 and 2025, respectively.
Following Northvolt’s bankruptcy, the Quebec government withdrew its funding commitments for the project, resulting in the loss of investments made by institutional investors. While Northvolt North America stressed the solvency of its operations, Quebec’s new economy minister declared the end of the partnership and the cessation of further funding. Quebec seeks to recover a substantial portion of its investment, including reclaiming the land designated for the factory.
With Northvolt North America declared insolvent and its entire workforce laid off, the aftermath of the failed project highlights the risks associated with ambitious ventures and the importance of prudent business strategies.
