Quebec has made a substantial bet on its future as a global leader in electric vehicle (EV) battery production by investing $2.9 billion to lure Northvolt, a Swedish battery manufacturer, to set up its new factory in the province, making it one of the largest financial commitments by the province in recent years.
The first phase of the project involves a C$7 billion investment and will have an annual production capacity of 30 gigawatt hours (GWh). This facility will not only produce batteries but also house adjacent facilities for cathode-active materials production and battery recycling. Production is slated to begin in 2026.
To help lure Northvolt to Quebec for its first factory in North America, the federal government is contributing up to C$1.34 billion to support the project, while the Quebec government is providing C$1.37 billion in capital. Additionally, Quebec plans to offer an additional $1.5 billion in production incentives within five to nine years. As a part of its contribution, Quebec is acquiring a C$420 million equity share in Northvolt.
Northvolt’s decision to choose Quebec as the location for its new factory was also influenced by several other factors. Quebec boasts abundant hydropower resources, making it an attractive destination for environmentally conscious manufacturers. Furthermore, the region is rich in raw materials, including lithium, which is crucial for battery production. Northvolt aims to source a significant portion of its raw materials locally.
“The potential for Northvolt Six is enormous, not only to rapidly develop our capacity to deliver sustainable batteries to the North American market, but also to accelerate the emergence of Quebec as a key player in the global energy transition. With its unique access to 100% renewable energy and raw materials, we consider Quebec to be the ideal base of operations for Northvolt’s first gigafactory outside of Europe. We look forward to collaborating with all local stakeholders and the province, to make Northvolt Six an example of sustainable investment,” said Paolo Cerruti, co-founder of Northvolt.
The battery factory is set to create around 3,000 jobs in its initial phase. It will be located on a 170-hectare site in McMasterville and Saint-Basile-le-Grand, in the suburbs of Montreal.