Biden policy led Northvolt to Canada for $5.2B EV battery plant

Swedish battery firm Northvolt on Thursday said it would build a $5.2 billion (USD) EV battery factory in Canada’s Quebec province—its first outside of Europe.

Known as Northvolt Six, the factory will be located just outside Montreal, according to a company press release. The first phase of construction is scheduled to start this year, with the goal of getting the factory operational by 2026.

The factory will initially have 30 gigawatts of annual battery production capacity, later expanding to 60 gigawatts. The 170-hectare site will host cathode and cell manufacturing, as well as battery recycling, according to Northvolt.

Rendering of Northvolt Six battery factory in Quebec, Canada

Rendering of Northvolt Six battery factory in Quebec, Canada

The Inflation Reduction Act (IRA) passed last year was one of the factors in the company’s choice of Canada for the new factory. The location checks one of the boxes for qualification for the revamped federal EV tax credit which, under the IRA, stipulates North American production for EV batteries.

“IRA took the industry by surprise,” Northvolt co-founder Paulo Cerruti, a former Tesla executive when that company was setting up its Nevada Gigafactory, said in an interview with Reuters. He said Northvolt assembled a site selection team around a year ago, accelerating the process in early 2023. Some sites in the U.S. were also considered, Cerruti told Reuters. The Canadian site was ultimately chosen in part because of access to raw materials and renewable energy.

Cerruti also told Reuters that Northvolt had secured an “anchor customer” for the Canadian factory, but declined to name it. The company has already named two major automakers as customers for its European battery plants.

Northvolt Revolt battery recycling

Northvolt Revolt battery recycling

Northvolt plans a mammoth battery plant in Sweden with Volvo capable of supplying 500,000 EVs annually. It appears an electric XC60 SUV might be one of the first Volvo products to get Northvolt cells—around 2026. Northvolt is also planning to make $2.3 billion of batteries for BMW, starting in 2024.

Northvolt started in 2017 with multiple former Tesla executives, and declarations that if nobody rises in Europe to scale up with EV batteries, Europe would be dependent on Asia for its battery supply. In 2021, it showed a cell made with 100% recycled nickel, manganese, and cobalt (NMC).

Source link