Canada will not be making further investments in Northvolt, the Swedish electric vehicle battery maker, following its bankruptcy filing in the United States on Thursday, according to a Canadian government source.
The company filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Houston, citing severe liquidity issues. In its petition, Northvolt acknowledged that its financial situation had become “dire.”
Northvolt’s Canadian plant, currently under construction in Quebec, was a cornerstone of Canadian Prime Minister Justin Trudeau’s industrial and climate policies. However, despite its strategic importance, the Canadian source stated that additional funding for the company was “not on the cards” from either the federal government or the Quebec provincial government.
In its bankruptcy filing, Northvolt clarified that its Canadian and German operations are not part of the bankruptcy proceedings and that work on the Canadian plant, named Northvolt Six, will continue. Although initially expected to begin operations in 2026, the company has since revised this timeline, suggesting a delay.
Northvolt had planned to invest C$7 billion ($5.17 billion) in the Quebec facility, with both the Canadian and Quebec governments contributing C$1 billion each for the first phase of construction. The plant holds approximately $240 million in cash, according to the bankruptcy filing, and remains central to the company’s growth strategy.
The Canadian government had committed to supporting the EV industry, offering C$56 billion ($41.34 billion) in production credits and support to 13 battery companies and automakers, including Northvolt. However, in light of the company’s financial troubles, further government investments are now in question.
Source: Reuters
