Northvolt confirmed to Radio-Canada that it will be able to pay the $38 million in taxes it owes to the Swedish government on Monday. However, she is not at the end of her troubles, if we trust the words of Alexander Norén. Visiting ICI RDI, this Swedish economic journalist who follows this firm closely believes that next week will be decisive for the company.
Beyond the amount due Monday, Alexander Norén believes that Northvolt will have to obtain investments equal to several billion crowns [suédoises]
to be able to save its factory in Skelleftea, Sweden.
One billion Swedish crowns is equivalent to approximately $135 million Canadian. The sums necessary to ensure the survival of the company far exceed the $38 million that will be paid.
The 1,600 employee layoffs as well as the bankruptcy of its Skelleftea subsidiary effectively suggest that the financial picture of the company is bleak. Another pitfall: Northvolt will have to turn to private investors to ensure its sustainability, according to Alexander Norén, because the Swedish government has declared that it has no intention of financing the company.
If the prospect of the company going bankrupt in Sweden is very real, according to this Swedish journalist, the Quebec component would not be in immediate danger. A Northvolt spokesperson, Emmanuelle Rouillard-Moreau, assured that the bankruptcy of one of its subsidiaries in Sweden would not have an impact on the project in Quebec.
The work surrounding our project in Quebec is progressing as planned and we remain determined to contribute to the local economy.
These arguments are taken up by the former Minister of the Economy Pierre Fitzgibbon.
I believe that Northvolt, in one form or another, will survive and that the project will be done in Quebec
said Saturday evening, at the microphone of the show Anything can happen, the one who launched the battery industry in Quebec, Pierre Fitzgibbon.
Open in full screen mode
Pierre Fitzgibbon was Marie-Louise Arsenault’s guest on the show “Everything can happen”.
Photo : Radio-Canada / Nora Chabib
What explains Northvolt’s financial woes?
According to Alexander Norén, it is the company’s inability to produce batteries at the necessary scale
which explains his financial problems.
It specifies that it is not able to produce batteries at more than 5% of its capacity. In other words, the company has the capacity to produce many more batteries, but it does not do so, because the demand is not there.
This drop in demand for electric batteries is part of a global trend. Many companies associated with transportation electrification are struggling with financial difficulties, including Taiga and Lion Électrique in Quebec.
Added to this drop in demand are Chinese companies, which are flooding the market with batteries manufactured and sold at lower costs.
With information from Gabrielle Proulx
