Quebec scraps support for $7B Northvolt battery plant

Key Takeaways:

• Quebec has officially scrapped the $7-billion Northvolt battery plant after the company failed to deliver a viable plan, leaving the province unable to recoup its $270-million equity stake following Northvolt’s bankruptcy in Sweden.
• Of the $510 million in taxpayer support, Quebec expects to recover only the $240-million loan, while Hydro-Québec will reallocate 352 megawatts of reserved power once earmarked for the plant.
• The failure underscores wider setbacks in Canada’s EV push, with multiple stalled or delayed projects raising questions about the long-term payoff of more than $50 billion in federal and provincial subsidies.

The Whole Story:

Quebec has pulled the plug on the Northvolt battery plant, ending a high-profile but troubled project once billed as a cornerstone of the province’s green industrial strategy.

Economy Minister Christine Fréchette announced Tuesday the government will no longer invest in Northvolt Batteries North America, saying the company failed to present a plan that met Quebec’s interests.

“This venture proved unsuccessful, and we are obviously disappointed,” Fréchette said in a statement, adding the province will seek to recover as much of its investment as possible.

The decision marks the collapse of Northvolt’s $7-billion plan to build a plant in Saint-Basile-le-Grand and McMasterville, south of Montreal. Quebec had backed the project with $510 million in public money, including a $240-million guaranteed loan and a $270-million investment in the Swedish parent company.

Fréchette said the $270 million is lost following Northvolt’s bankruptcy filing in Sweden earlier this year, but the government expects to recover the loan. Hydro-Québec had also set aside 352 megawatts of power for the facility, which will now be reallocated.

The plant was touted as a pillar of Premier François Legault’s “battery sector” strategy, intended to attract research, mining and manufacturing linked to electric vehicle production. Fréchette said other projects remain on track.

Opposition parties blasted the government, accusing the Coalition Avenir Québec of mismanagement. Liberal Leader Pablo Rodriguez called the project “a failure on the planning level and on the execution level.” Québec solidaire’s Ruba Ghazal said Quebecers may never see their money again, while Parti Québécois MNA Pascal Paradis called it “hundreds of millions of dollars … wasted by the CAQ government.”

Canada’s overall EV push has hit major roadblocks, with Honda shelving a $15-billion Ontario battery complex, BASF and Northvolt stalling projects in Québec, GM pausing BrightDrop van output in Ingersoll, and Ford delaying Oakville EV launches. Weakened demand, U.S. tariffs, and ballooning costs have raised doubts about whether Ottawa’s $50-billion bet on foreign-owned battery plants will pay off.