Major Canadian pension funds and the Quebec government have collectively lost more than $1 billion following the bankruptcy of Swedish battery manufacturer Northvolt AB, marking one of the largest investment failures for Canada’s public sector in recent years.
The Investment Management Corporation of Ontario wrote down its entire $400 million investment, while the Ontario Municipal Employees Retirement System booked a $325 million loss, the pension funds announced in recent months. The Canada Pension Plan Investment Board lost $55 million, and Quebec’s pension fund manager, the Caisse de dépôt et placement du Québec, wrote off $150 million.
Quebec’s government suffered additional losses, losing $270 million invested directly in Northvolt’s Swedish parent company when it filed for bankruptcy in March. The province had committed up to $2.9 billion for a planned battery factory near Montreal, with construction never beginning.
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“Since the company did not present a satisfactory plan with respect to Quebec’s interests, we are asserting our rights to recover the maximum amount of our investment,” Quebec Economy Minister Christine Fréchette said in a statement Tuesday, announcing the province was ending all funding for the project.
Northvolt, once hailed as Europe’s answer to Chinese battery dominance, filed for bankruptcy protection in Sweden in March after initially seeking Chapter 11 protection in the United States in November 2024. The company had raised over $13 billion in debt and equity since its founding in 2016.
The collapse came after a series of production delays and the loss of a $2.15 billion battery order from BMW in June. Northvolt struggled to meet manufacturing targets at its flagship facility in northern Sweden, managing only 20,000 battery cells per week against a goal of 100,000.
Canadian pension funds had been significant backers of the electric vehicle battery startup, participating in multiple financing rounds as Northvolt planned expansion across Europe and North America. The investments were part of broader strategies to capitalize on the growing electric vehicle market.
The failure delivers a major blow to Canada’s electric vehicle battery ambitions. The federal government had committed up to $4.4 billion in support for the Quebec plant, which was announced with fanfare by then-Prime Minister Justin Trudeau in September 2023 as a “historic and transformative” development.
Industry experts cite Northvolt’s collapse as emblematic of challenges facing non-Chinese battery manufacturers competing against established Asian suppliers who dominate global production and supply chains.
The bankruptcy filing cited “rising capital costs, geopolitical instability, supply chain disruptions, and shifts in market demand” as contributing factors to the company’s demise.
Northvolt’s Canadian and German subsidiaries were not included in the bankruptcy proceedings, though their future remains uncertain as a court-appointed trustee determines the disposition of company assets.
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