Northvolt nears deal with Canada on $5.3bn battery plant

Swedish company says its goal is to build the world’s 'greenest battery'

Swedish battery maker Northvolt is reportedly set to announce a deal to open a plant in Quebec, Canada. Photo: Northvolt AB

Swedish manufacturer Northvolt is close to a deal to build an electric-vehicle battery plant near Montreal, a project that is expected to be worth about $5.3 billion.

The Canadian and Quebec governments are preparing to give financial aid to Northvolt, which may be worth billions, after a similar agreement with Volkswagen to build an EV battery plant in Ontario.

According to a Bloomberg report, announcement is likely to be made in the coming weeks, although negotiators are still working on final details.

A deal with Northvolt would underscore Prime Minister Justin Trudeau’s ambitions for Canada to capture a sizeable piece of the North American electric-vehicle supply chain, at a huge cost to the public purse.

The Northvolt project – to be built in Saint-Basile-le-Grand, about 25km east of Montreal – is to include a cathode factory, a battery cell assembly line and a recycling facility, sources said.

If it is built to plan, it would be one of the largest private-sector investments ever in Quebec, Canada’s second most-populous province.

By choosing Quebec, Northvolt, which says its goal is to build the “world’s greenest battery", will benefit from the province’s low-cost and clean hydroelectric power.

“Northvolt is currently doing a site study in North America, analysing multiple possible locations in the US and Canada,” Northvolt spokesman Anders Thor told Bloomberg News.

"This process is still ongoing and no final investment decision has been made.

Northvolt, based in Stockholm and founded by former Tesla executives in 2016, has a primary plant in Skelleftea, Sweden, and two other factories in the works in Europe.

The company has partnerships with Volvo Group, BMW and Volkswagen, and says it has more than $55 billion in contracts.