Northvolt announces 1,600 layoffs in Sweden, insists Quebec EV battery plant won't be affected

Electric vehicle battery manufacturer Northvolt says construction of a $7-billion plant on Montreal's South Shore will proceed as planned, despite announcing on Monday its intention to lay off 1,600 employees in Sweden.

The Swedish multinational said it plans to cut 1,000 jobs in Skellefteå, 400 in Västerås and 200 in Stockholm — about a fifth of its global workforce — in response to "headwinds" in the automotive market "and wider industrial climate." It said the layoffs will be negotiated with the relevant unions.

Northvolt said Monday the layoffs will have no bearing on Quebec, where excavation for the first building of the 170-hectare mega-factory is 60 per cent complete.

But opposition politicians in the province are raising concerns about the future of the project and questioning what this means for the governing Coaltion Avenir Québec's massive investment in Northvolt. 

In an interview, the Official Opposition's economy critic, Liberal MNA Frédéric Beauchemin, criticized the government for "putting all its eggs in one basket" — one that he calls risky. 

"We could have gone with quality players," he said, listing Ford, GM and Volkswagen. "But the government decided to go all in with a player that's a startup. Don't ask me why, I don't understand that choice." 

The Parti Québécois (PQ), for its part, is calling for an emergency debate to be held Tuesday in the National Assembly about what the company's decision to cut jobs means for Quebec. 

'Stop wasting our money' 

Speaking to reporters Monday, PQ leader Paul St-Pierre Plamondon said he's seeking clarification on a number of areas in the project, including what he calls a lack of transparency about the government's financial plan should Northvolt's fortunes turn bad and the environmental impact of the project. 

"We bypassed the BAPE [Quebec's environmental watchdog], so there was no environmental assessment of the project, but we know that contaminants can be sent into the watercourse with repercussions on health and that raises many questions," he said. 

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Haroun Bouazzi, energy critic for Québec Solidaire and the MNA for Maurice-Richard, said the CAQ must "stop wasting our money" and is imploring the premier not to put another cent into Northvolt. 

"The CAQ has already injected $700 million of public money into this," Bouazzi said in a statement, calling the project troubled and increasingly worrisome for the public. 

In a statement, Quebec's newly appointed Economy, Innovation and Energy Minister Christine Fréchette said despite a global slowdown in the EV battery market, the project will still have financial as well as environmental benefits for the province. 

She called the project "a controlled risk" but said the government is in constant contact with Northvolt. 

Project could be delayed

Production at the plant being built in Saint-Basile-le-Grand, Que., was slated to begin in 2026, but the company's ongoing strategic review raises the possibility of delays. 

Pierre Fitzgibbon, the Quebec cabinet minister in charge of the Northvolt file until his resignation earlier this month, had said the project could take up to a year-and-a-half longer than expected to open.

Quebec's government pledged $2.9 billion in financing to secure the deal with Northvolt last year. Meanwhile, Ottawa committed up to $1.34 billion to build the plant and another $3 billion in incentives.

In a release on Sept. 9, Northvolt said it would "maintain its commitments" for the construction of three major installations, including the Quebec plant, but would unveil a revised timetable "as well as all other actions necessary to reduce costs."

In a statement issued by the company Monday, Northvolt CEO Peter Carlsson said "while overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time" and "focus all energy and investments into our core business."

The company said it would suspend plans for a large expansion of its Northvolt Ett factory in Skellefteå, adding it would focus resources on accelerating production of battery cells at the plant and prioritizing commitments to its existing automotive customers.