Quebec ends funding for Northvolt battery factory after losing $270M investment

Quebec officially ended its financing of the Northvolt battery factory in Mcmasterville.

The Quebec government is pulling the plug on a $7-billion electric-vehicle battery project near Montreal and trying to recoup some of its investment.

Economy Minister Christine Fréchette announced Tuesday that the government is cutting its losses on the planned Northvolt battery factory after spending $510 million on the troubled venture, once touted as the largest private investment in the province’s history.

The Quebec government pledged up to $2.9 billion in financing for the project, while Ottawa committed up to $4.4 billion. But construction of the plant never got underway.

“Since the company did not present a satisfactory plan with respect to Quebec’s interests, we are asserting our rights to recover the maximum amount of our investment,” Fréchette said in a statement. “This adventure has proven unsuccessful, and we are obviously disappointed.”

Plans for the battery plant have been up in the air since Northvolt’s Swedish parent company filed for bankruptcy in March. Last month, American battery startup Lyten announced it was acquiring Northvolt’s assets in Sweden and Germany and hoped to buy the Northvolt Six project in Quebec’s Montérégie region.

Catherine Pelletier, a spokesperson for Fréchette, said government representatives met with Lyten in July and August, but the company wanted more government funding that Quebec was unwilling to offer. She said Lyten made “disproportionate demands,” though she would not provide figures.

Pelletier said the government was concerned about risking more taxpayer money on another relatively new company.

In a statement, Northvolt Batteries North America said it found the decision “regrettable,” and said it had been in contact with potential buyers until this week. “It is important to remember that (the North American subsidiary) is not bankrupt and still had solid financial resources to relaunch the project,” the company said. “It was a great project, and our team still believed in it.”

Keith Norman, Lyten’s chief marketing officer, said the company accepts Quebec’s decision. “We have been clear with our desire to acquire the site to build a North American gigafactory, and if given the opportunity, we would be happy to work with the Quebec government to develop the site,” he said in a statement.

The Northvolt project was unveiled to great fanfare in September 2023, at an event attended by then-prime minister Justin Trudeau, who called it a “historic and transformative” announcement.

Quebec’s pension fund manager, the Caisse de dépôt et placement du Québec, had also invested $200 million in the company.

The province’s funding of the Northvolt project included a $270-million investment in the Swedish parent company that was lost when it went bankrupt.

However, Quebec is hoping to recover a $240-million guaranteed loan issued to purchase the land for the plant. Pelletier said the government filed documents in court on Tuesday under creditor protection legislation and said a judge will have to authorize a process for the sale or repossession of the land.

“Given our existing security interests on our debt, we are well positioned to recover the full value of our debt at the end of this process,” she said.

Fréchette said the failure of the project does not spell the end for Quebec’s battery industry.

“On the contrary, our sector is very much alive with several companies active in this ecosystem,” she said. “We remain convinced that it has a bright future.”

Fréchette said nearly 3,000 people are working on the construction of battery factories in Bécancour, Que.

But Quebec Liberal Leader Pablo Rodriguez was quick to accuse the government of mishandling the project. “We’ve put all our eggs in one basket,” he told reporters in Ste-Foy, Que. “It’s a failure both in terms of planning and execution.”

This report by The Canadian Press was first published Sept. 2, 2025.

– With files from Caroline Plante in Quebec City