Swedish battery cell manufacturer Northvolt has chosen a site on the coast of Montreal to construct its first North American Gigafactory. The company will invest five billion euros in the region. The plans were unveiled in May of this year, but the company was yet to make a final choice between the US and Canada.

The rumor that Northvolt intended to embark on Canadian shores has been confirmed. Northvolt Six will be a cell factory for lithium-ion technology, targeting 60 GWh of annual capacity to meet the growing demands of the North American BEV market. In the first phase, set to be completed in 2026, only half of that capacity will be made available, with a ramp-up later.

‘Thanks to renewable energy’

All the other factories from Northvolt are operational under European law. They are, therefore, not eligible for US subsidies, which only have a bilateral deal with Japan but which apply outside the US to the North American trade deal.

This was one of the reasons why Northvolt put its vizor on North America. Initially, it was said that this decision would delay the construction of Northvolt Drei in Heide, Germany, or maybe even cancel those plans. But the Drei plant is currently under preparation as well.

“Thanks to its unique access to renewable energy and raw materials, we see Quebec as the ideal base of operations for Northvolt’s first Gigafactor outside Europe,” said Paolo Cerruti, the group’s North American CEO, in a statement.

The region isn’t unchartered territory for Cerruti. Before he founded Northvolt, together with Peter Carlsson, both men were co-executives at Tesla’s first Gigafactory in Nevada.

Though Northvolt remains tightlipped about the received incentives from the Canadian government, it is rumored the company was funded with a budget as high as three billion dollars (2,8 billion euros). Cells made in Canada are also eligible for Joe Biden’s IRA incentives, as both countries have a commercial partnership.

First brick in Gothenburg

Over in Europe, Northvolt held an inaugural ceremony with Volvo on Thursday to start the construction of both partners’ Gigafactory in Gothenburg under the name Novo. This plant is not wholly owned by Northvolt but by a joint venture set up by both companies.

With actual construction works starting on the first of October, this plant should be operational by 2026 as well, with a delay of one year on the original schedule. The capacity of the Novo factory is 50 GWh, and it also houses a research facility for cell development and technology.