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Northvolt Secures $7 Billion Deal with Quebec and Ottawa for Battery Cell Factory

29 September 2023 10:55

Quebec and Ottawa have announced a groundbreaking $7 billion partnership with Swedish battery manufacturer Northvolt to establish Northvolt Six, a cutting-edge battery cell factory with a 60 GWh capacity, poised to transform the Canadian EV battery manufacturing sector and create over 3,000 jobs in the McMasterville and Saint-Basile-le-Grand regions of Quebec.

A Massive Facility Takes Shape

The colossal Northvolt facility will span 170 hectares and will be located near Saint-Basile-le-Grand and McMasterville, Quebec, approximately 30 kilometres east of Montreal.

The Project’s initial phase boasts a total investment of $7 billion, offering an annual battery cell manufacturing capacity of up to 30 GWh.

This historic announcement, celebrated as Quebec’s most substantial private investment to date, witnessed the joint presence of Prime Minister Justin Trudeau and Quebec Premier François Legault in Montreal, accompanied by ministers and Northvolt executives, while also holding the promise of creating up to 3,000 jobs in the region at full production capacity.

A Glimpse into the Future

The construction of Northvolt Six will occur in two phases, with the first phase set to commence before the end of this year, with construction commencing promptly.

During this initial phase, the factory will have an annual output of 30 GWh. Although a timeline for the second phase remains undisclosed, it is expected to double the factory’s output to an impressive 60 GWh per year, equivalent to powering over a million vehicles.

“This is a historic and transformative announcement,” Trudeau declared, emphasising that this investment will bring comprehensive battery manufacturing capabilities to Canada.

He added, “This facility will be able to produce batteries for a million electric vehicles a year, and at full production capacity, the plant will contribute up to $1.6 billion to our economy.”

Northvolt Six will be responsible for the production of battery cells, components, and materials, including precursor cathode active materials (pCAM), cathode active materials (CAM), lithium-ion battery cells, and lithium-nickel-manganese-cobalt-oxide (NMC) from battery recycling. A noteworthy sustainability goal for Northvolt is to incorporate at least 50 percent recycled materials into its battery cell manufacturing process.

In addition to battery cell manufacturing, the site will house facilities for cathode active material production and battery recycling.

An Investment of Unprecedented Scale

The construction of this groundbreaking factory will see a collective investment of $2.7 billion from Quebec and Ottawa, with completion anticipated by the end of 2026.

Both Canada and Quebec have committed to supporting Northvolt with production incentives mirroring the Inflation Reduction Act’s Advanced Manufacturing Production Credit in the United States, totalling up to $35 US per kWh.

The Company will also be eligible for government production incentives, potentially amounting to $4.6 billion over the next five to nine years, with one-third of the contribution coming from the Quebec government, amounting to an additional $1.5 billion.

This announcement represents a pivotal moment in Quebec’s EV battery supply chain, particularly following Britishvolt’s withdrawal from plans to establish a 60 GWh battery cell factory in the region due to bankruptcy the previous year.

Northvolt’s unwavering commitment now steps in to fill this void, offering a promising outlook for Quebec’s economy.

Northvolt COO & Co-Founder Paolo Cerruti encapsulated the significance of Northvolt Six, emphasising, “With Northvolt Six, we unlock tremendous potential, not only to rapidly expand our capacity for delivering sustainable batteries to the North American markets but also to propel Quebec into a pivotal role in the global energy transition.”

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