Northvolt's EV battery plant in Quebec could be delayed up to 18 months

The construction of a$7-billion electric vehicle battery planton Montreal's South Shore could take up to a year and a half longer than originally planned, according to the Quebec government.

Production at the plant was slated to begin in 2026, but a strategic review being carried outbySwedish EV battery manufacturer Northvoltcould result in a reassessment of the timetable, the company said in a statementSaturday.

It added that nothing has been finalized and that the results of the review are expected in early fall.

"In the meantime, engineering and design of the technology complex are ongoing, and site preparation work continues," the multinational said.

The review comes as global demand for electric vehicles has slowed, with both Ford and General Motors saying they wouldscale backtheir production of electric vehicles.

On X, QuebecEconomy Minister Pierre Fitzgibbonsaid the battery industry is slowing down worldwide, saying experts expect a period of stagnation lasting 12 to 18 months.

"This slowdown could apply to Northvolt," he wrote.

Northvolt has two massive plants in the works one in Canada and the other in Germany and has fallen behind on the building schedule of its mega-factory in Sweden. The company has said in the past that this could slow down its international development plan.

What impact could a delay have?

Normand Mousseau, the scientific director of theTrottier Energy Institute at Polytechnique Montral, clarified EV sales are still increasing in general, but growth has slowed in certain regions. This, he said, is having an effect on manufacturers.

"There are issues in the investments from the North American car manufacturers who are kind of pushing back a bit on their development of electric cars," he said.

Trottier says a delay of Northvolt's plant couldmean aloss of competitiveness in the EV industry.

"If the investments are going forward elsewhere in NorthAmerica, it means that we are losing competitiveness with respect to other places where batteryfactories are being built," he said, noting contracts will go to where things are actually being built.

"All delays with respect to other places being developed is bad news in terms of the capacity to compete," he said.

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A new tariff on Chinese-made electric vehicles is meant to protect Canada's emerging manufacturing industry, but theres fear about what potentially higher-priced EVs mean for already limited competition.

Meanwhile, manufacturers are watching how the politics around the industry evolves. This week, in alignment with the U.S., Canada announced a100 per cent tariff onChinese-made electric vehicles to"level the playing field for Canadian workers" and allow Canada's nascent EV industry to compete at home, in North America and globally.

Daniel Breton, president and CEO of Electric Mobility Canada, says if the government expanded that tariff to include Chinese-made EV batteries as well, it could increase demand for local production.

Theother uncertainty, Breton says, is related to the US election and what might happen if Donald Trump is re-elected.

"Trump and his party have been very vocal about their pushback against the transition to EVs, so if he does indeed get elected, this could slow down the industry as a whole in North America," he said.

"We're all waiting to see what'sgoing to happen."

Opposition attacks Quebec

The 170-hectare plant will be built between the municipalities of Saint-Basile-le-Grand andMcMasterville, about 30 kilometres southeast of Montreal.

To do so, the company must obtain a host of government authorizations, although regulatory changesbefore the approval of the projectenabled it to avoid a review by Quebec's environmental review board (BAPE) a move that experts say has hindered public trust.

This potential delay has given ammunition to the opposition parties, who are taking theopportunity to launch new attacks on the Quebec government.

Parti Qubcois environment critic Jol Arseneau said on X that this potential delay is an opportunity for the government to "get its act together, finally do its homework and launch a BAPEfor the sake oftransparency."

Quebec Conservative Party leader ric Duhaime and Quebec Liberal Party interim leader Marc Tanguay both accused the Legault government of putting all its eggs in one basket on X.

"He should have just as much interest in investing in our SMEs, which are at the heart of our economy in all our regions," said Tanguay.

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 worth of other incentives.

Once completed, the plant is expected to have an output of 56,000 tonnes of batteries per year.