Northvolt, a battery maker, cautions about potential delays to Canada plant amidst strategic review.

September 9, 2024 TruthUSA

Northvolt, a Swedish electric vehicle battery maker, has indicated potential delays in the construction of its Quebec plant due to challenges identified in a recent strategic review amidst the current economic conditions.

Last year, Northvolt unveiled plans to establish an electric vehicle battery manufacturing facility in Montreal, with significant subsidies from the federal and Quebec governments. However, the company suggests that the timeline for this project may be adjusted following a strategic review initiated in July, focusing on the development of a new lithium-ion battery gigafactory in Sweden.

Peter Carlsson, Northvolt’s co-founder and CEO, stated in a press release on September 9 that “With the strategic review now underway, we are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance.”

Northvolt will confirm any changes to the Canadian project timelines later this fall. The company is implementing various adjustments as part of its strategic review, including pausing operations at a key production facility in Sweden to reduce costs and merging its U.S. subsidiary Cuberg with Northvolt Labs in Sweden.

The company referenced the challenging economic environment as a driving factor behind the operational changes and resizing of its workforce.

In June, Northvolt lost a 2 billion euros (C$2.9 billion) contract with automaker BMW.

Carlsson expressed optimism about the long-term outlook for his company and other cell manufacturers, citing a strong global transition toward electrification.

Recent setbacks have been seen in other electric vehicle (EV) battery projects in Canada, attributed to diminished demand.

Umicore Rechargeable Battery Materials Canada Inc. announced a delay in constructing its battery materials plant in Ontario due to a slowdown in EV growth forecasts. This was further highlighted in a financial report showing reduced sales of battery materials linked to contractual changes and setbacks related to a Chinese battery manufacturer.

Umicore’s Ontario project, initially estimated at nearly $2.8 billion, received substantial funding commitments from government sources totaling around $976 million.

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