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Monday, Dec 4, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Alternative Energy

Northvolt set to build lithium-ion battery factory in Quebec for $7B

The site location’s proximity to Quebec hydroelectricity meets criteria for sustainable battery production

Northvolt set to build lithium-ion battery factory in Quebec
Northvolt's proposed facility - Northvolt Six. Image via Northvolt.

Swedish battery manufacturer, Northvolt announced on Friday that it will build a lithium-ion battery gigafactory outside of Montreal, Quebec, with operations set to begin in 2026.

Principle construction is slated to begin by the end of 2023 on what the company is calling Northvolt Six, and will be home to 60 gigawatt hours of yearly cell manufacturing, with facilities for cathode material production and battery recycling, which will allow for fully circular onsite production.

The initial phase encompasses cathode and cell manufacturing alongside recycling operations and is anticipated to require a total government investment of $7 billion and will provide approximately 3,000 jobs.

Quebec and Ottawa are teaming up to invest $2.7 billion in building the factory, which is anticipated to be completed by the end of 2026. Both Canada and Quebec are committed to providing support to Northvolt’s production that aligns with the Advanced Manufacturing Production Credit under the Inflation Reduction Act in the United States.

This support could amount to as much as USD$35 per kWh. Additionally, Northvolt stands to receive government production incentives totaling $4.6 billion over the next five to nine years, with Quebec contributing a third of this amount, which totals an additional $1.5 billion from the province.

The 170-hectare site for Northvolt Six in McMasterville and Saint-Basile-le-Grand, near Montreal, was chosen after a thorough review of North American locations. It meets essential criteria for sustainable battery production, thanks to Quebec’s hydroelectricity, which ensures 100 per cent renewable energy for cell production. Additionally, this region is strategically positioned in the North American automotive industry.

Paolo Cerruti, Northvolt’s co-founder and incoming CEO, views this factory as a strong base of operations for Northvolt’s first gigafactory outside of Europe due to its access to renewable power and raw materials.

“We have in Northvolt Six enormous potential, not only to rapidly expand our ability to bring sustainable batteries into markets of North America, but to accelerate Quebec’s emergence as a key actor in the global energy transition,” said Cerruti.

Read more: American Battery Technology gets government contract for low cost battery materials

Read more: Lithium South Development Increases Lithium Resource by 175% and begins well-drilling program at Argentina’s Hombre Muerto North

Quebec is top ranked jurisdiction for electric vehicle production: Fraser Institute

The Province of Quebec has shown itself to be popular with electric vehicle manufacturers.

Earlier this year, Ford Motor Co. (NYSE: F) and its South Korean collaborators committed to constructing a $1.2 billion manufacturing facility for electric vehicle battery materials in Bécancour, Quebec, with financial support from the government.

The project is receiving substantial backing from both the Quebec and federal governments, with each contributing $322 million, covering approximately half of the total cost. This initiative is not only seen as environmentally beneficial but also as a positive driver for the economy.

Other companies involved in Quebec’s EV boom include Tesla Inc. (NASDAQ: TSLA) and Quebec-based Lion Electric (NYSE: LEV) (TSX: LEV).


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