Plans for 2 Quebec EV Battery Projects Upended, With One Project Suspended and Other Cancelled

An electric vehicle is charged in Ottawa on July 13, 2022. The Canadian Press/Sean Kilpatrick

Two electric vehicle (EV) battery-related projects in Quebec have hit a roadblock, with one put on hold and the other cancelled, as companies respond to a global slowdown in the EV industry.

The planned expansion of Ultium Cam EV battery materials facility in Bécancour, Que., has been put on hold, while a second plant planned by Vale Base Metals that was intended to supply nickel sulfate to Ultium Cam has been scrapped, as first reported by Radio-Canada.

The Ultium Cam project, a joint venture between GM and South Korean company POSCO to produce cathode active materials used in EV batteries, was in its second phase. The first phase, at a cost of $600 million, is already under construction and expected to begin production in 2026. GM spokesperson Marie Binette said the decision to pause moving forward on the second phase was made “in light of evolving market dynamics.”

Quebec’s Minister of Economy, Innovation, and Energy Christine Fréchette said Oct. 16 that a global slowdown in the EV battery supply chain is partly to blame for the shutdown and suspension.

“It certainly has an impact on our projects, which are at the heart of the battery industry,” she said. “But … just because it’s slowing down doesn’t mean it’s not moving forward.”

The federal and provincial governments have contributed about $300 million toward the first phase of the Ultium Cam project, including a $152 million partly forgivable loan from Quebec. Earlier this week, GM reported it will record a negative impact of US$1.6 billion in its next quarter after tax incentives for EVs were slashed by the United States and rules governing emissions are relaxed.

The news of the Ultium Cam project’s suspension and Vale Base Metals’ cancellation comes in the wake of Quebec’s decision in September to stop funding for the planned Northvolt EV battery plant near Montreal. At the time, Fréchette said Northvolt Batteries North America’s plan for the plant, slated to produce enough batteries for 1 million EVs per year, was not viable.

Quebec lost the $270 million in investment it had made in the parent company of Northvolt when it declared bankruptcy in Sweden in March.

Upon its initial announcement in 2023, the Northvolt project was hailed by former Prime Minister Justin Trudeau and Quebec Premier François Legault as an economic milestone that would create tens of thousands of new jobs and add $1.6 billion annually to the GDP. Despite Quebec’s financial loss in the project, Fréchette said in September that the EV industry in Quebec had a “bright future,” particularly in Bécancour, where around 3,000 people are employed in plant construction.

Also in September, Quebec suspended all 1,200 Lion electric school buses after one caught fire in Montreal on Sept. 9. “Neither the electric battery nor the propulsion system was involved,” the company said in a Sept. 12 press release.

Several Lion electric school buses have caught fire, including this past January in Huntsville, Ont., and in November last year in Quebec’s Eastern Townships, with no injuries reported. The company has also been hampered by numerous reports of mechanical problems on its electric school buses in the United States, leading to the recall of various models.

Lion Electric applied for creditor protection in December last year and was bought by a group of Quebec investors in May, who shifted the focus onto exclusively producing electric school buses and scrapping plans to build electric semi-trucks and chargers.

The Canadian Press contributed to this report.