Northvolt files for bankruptcy in Sweden
How the electric car battery plant was projected to look. File photo
A Swedish company facing legal action from the Mohawk Council of Kahnawake (MCK) has declared bankruptcy. With that, what’s to come for the company’s plan to build a $7 billion electric car battery plant in the province remains to be seen.
The North American branch of the company hasn’t filed for bankruptcy, but it will be impacted, just to what extent is still uncertain. Decisions about what will come of the plant that’s yet to be constructed are expected to be made soon by court-appointed trustees from Sweden and lenders, Northvolt’s North American branch shared in a statement issued on March 12.
Quebec economy minister Christine Fréchette has since said she hopes a buyer will step in to invest in the project so it can be relaunched.
“Although the $270 million we invested into the parent company has been lost, the $240 million security interest loan in the land and assets of Northvolt’s North American subsidiary is still secured,” she wrote in a post on X the same day. “We are evaluating our options and will exercise our rights should assets in Quebec be liquidated.”
It’s not yet apparent how the bankruptcy could impact the MCK’s litigation against the company. MCK grand chief Cody Diabo wasn’t available to answer questions about the court filing.
The band council has had a case winding through Quebec Superior Court, triggered after the company, Quebec, and Canada failed to consult it over the project. Each level of government has since maintained otherwise in their defenses to the court.
Wetlands and woods have since been cleared at the site of the expected battery plant, located between Saint-Basile-le-Grand and McMasterville. The province authorized the clearing in January of last year, despite objections from the MCK.
The company filed for bankruptcy protection in Sweden back in November. Quebec ministers, including Fréchette and premier François Legault, assured the public then that the project would still be coming to fruition.
Northvolt has been hit hard by the global fall in the demand for electric car batteries, in part influenced by Donald Trump’s attacks on the industry in the United States. His government pulled previously committed subsidies to the company, a move that Canada later mirrored.
“Like many companies in the battery sector, Northvolt has experienced a series of compounding challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demands,” Northvolt’s parent company wrote in a statement announcing it had filed for bankruptcy.
“Further to this backdrop, the company has faced significant internal challenges in its ramp-up of production, both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen,” the statement continued.
As Northvolt’s North American branch remains solvent, it assured that it’s committed to meeting all its remaining financial obligations, including those toward their former employees.
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The Eastern Door learned that a judgment had recently been rendered by the judge overseeing the MCK’s legal challenge against the company. It has yet to be made public, however.
