The Quebec government says it has received assurances that the Northvolt AB electric vehicle battery plant under construction at Saint-Basil-le-Grand, on Montreal’s South Shore, won’t see any immediate job losses after the Stockholm-based manufacturer announced it is laying off about one-fifth of its global work force.
The C$7-billion project, announced with great fanfare last year as the biggest private investment in Quebec history, is meant to supply EV batteries to automakers Volkswagen and BMW. But the plant has faced intense local opposition, up to and including court action and sabotage. Now, Northvolt is one of many manufacturers responding slower growth in demand for batteries and the EVs that use them.
“It’s incredibly sad to have to announce this in a company that you have worked 24 hours a day for during the last eight years,” Northvolt CEO Peter Carlsson told local media in Skelleftea, the town in northern Sweden that is home to its main production plant. But the company has struggled since BMW cancelled a €2-billion purchase deal in June, citing quality issues, and VW—which owns 20% of Northvolt—complained about slow delivery of batteries for its Scania trucks.
“The company, which earlier this year was contemplating an initial public offering, has come under increasing strain as a production ramp-up faltered, EV demand slowed, and battery cell competition from China intensified,” BNN Bloomberg reports. “Northvolt has also faced a string of health and safety concerns ranging from worker deaths and injuries to reports of toxic chemical leaks.”
Northvolt was most recently said to be searching for an infusion of 7.5 billion kronor (US$737 million) to make September payroll.
The Globe and Mail says the most recent announcement will have no impact on the Saint-Basil-le-Grand factory. Northvolt previously placed the timing of the project under review, and prompting Quebec’s former minister of economy, innovation and energy, Pierre Fitzgibbon, to predict a 12- to 18-month delay. The review is expected to conclude by the end of this fall.
“Northvolt was wooed with billions of dollars in loans and production incentives from the Quebec and federal governments,” the Globe writes. Following the latest announcement, “the opposition Parti Québécois called for an emergency debate in response to Northvolt’s cuts, saying C$700 million in provincial taxpayer money could be jeopardized in a project it says lacks transparency.”
But “given the majority that Premier François Legault’s Coalition Avenir Québec government enjoys in the National Assembly,” the Globe continues, “such a debate is unlikely.”
