The federal government is scrambling to secure new investors to rescue a taxpayer-backed electric vehicle battery plant in Québec after its original developer, Swedish company Northvolt, declared bankruptcy.
Blacklock's Reporter says Industry Minister François-Philippe Champagne confirmed efforts were underway to keep the heavily subsidized project afloat.
“There is a short-term financial situation, but I explain to our European friends how important this is,” Champagne told reporters. “We need transatlantic partners and a European ally that is a leader in electric car batteries.”
Northvolt blamed its financial collapse on market downturns and economic pressures.
“Like many companies in the battery sector, Northvolt has faced compounding challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, supply chain disruptions, and shifts in market demand,” the company said in a statement.
The Swedish firm had received $4.3 billion in federal subsidies and $2.9 billion in aid from the Québec government to build the battery plant in Saint-Basile-le-Grand, Que.
Originally slated to begin production in 2026, the facility is now under the control of a bankruptcy trustee.
Champagne acknowledged public concerns about the factory’s future and said talks were ongoing to find a new buyer.
“We are working to see if we can keep it,” he said. When asked if China could take over the project, Champagne was firm: “No. I want to be very clear. The answer is no.”
The collapse of Northvolt comes just weeks after a government briefing warned that Canada’s electric auto strategy “may be adjusted” due to financial and market challenges.
Despite the setback, Champagne defended the government’s efforts to build an EV industry in Québec. “What’s important is we managed to get Québec into the automobile industry,” he said. “That’s the big gain.”