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Northvolt, Europe’s big battery hope, is building its first gigafactory outside the continent in Canada, taking a $5bn bet on the North American market as well as trying to secure better access to crucial minerals.
The Swedish start-up will start building its fourth large battery factory just outside Montreal later this year, with production due to start in 2026 as it seeks to service customers including Volkswagen, Volvo Cars and BMW in North America.
“North America is the next frontier for Northvolt,” co-founder Paolo Cerruti told the Financial Times. “We picked Canada mainly because of the renewable energy, the raw materials, the attitude of the government we have found here.”
Northvolt launched in 2017 with an aim of becoming one of the leading battery makers in Europe and a homegrown rival to the dominant Asian producers. It has opened a factory just below the Arctic Circle in Sweden, broken ground on a second plant in the country with Volvo and announced a third in Germany.
But thanks to US president Joe Biden’s generous subsidies — which Canada and its prime minister Justin Trudeau have promised to match “one for one”, according to Cerruti — Northvolt has raised its ambitions.
Canada’s government and the local administration in Quebec will each offer $1bn towards the building of the factory, which is expected to employ 3,000 people in its first stage. It will also match the substantial support offered by the US on operating costs. Northvolt has told EU officials that North American support could be worth as much as €8bn per gigafactory.
Northvolt will build in McMasterville a battery factory that will eventually have 60 gigawatt hours of annual capacity — equivalent to the needs of about 1mn electric cars a year and similar to the size of its Swedish and German plants — as well as a recycling facility and production of cathode active material.
The factory will run only on renewable energy, thanks to Quebec’s hydropower, and Cerruti — currently chief operating officer — will relocate to Montreal to become Northvolt’s head of North America.
Northvolt sells itself as the greenest big producer of batteries. Cerruti said the average Asian battery had emissions of about 100kg per kWh produced whereas Northvolt batteries in Sweden and Canada would have about 50kg/kWh. Its ambition by 2030 is to bring that down to 10kg in both locations.
Northvolt, which is considering floating on the stock market next year after raising more money than any other private European start-up, will initially focus on helping its predominantly European customers with their American operations but could also target the big local manufacturers.
Cerruti said Quebec’s potential for lithium and other minerals in Canada was a big draw in bringing it to Montreal.
As Northvolt tries to build four gigafactories in three countries at the same time, he added that the biggest bottleneck for the company was staff.
“It requires an incredible amount of discipline and organisation,” Cerruti said. “And we are still a young company. Our recipe is to standardise as much as possible in the blueprint of what we do. We are injecting experience from Sweden — people who have already done this once.”