Battery maker Northvolt moves ahead in Canada but at slower pace

By Divya Rajagopal

TORONTO (Reuters) - Electric vehicle battery maker Northvolt is moving ahead with plans to open a C$7 billion battery plant in Canada but at a slower pace in light of its announcement on Monday it would review spending plans and mull job cuts.

Construction work at the Swedish company's Montreal plant site and related hiring will continue and further details will be provided in the coming weeks, Paolo Cerutti, CEO of Northvolt North America told Reuters. Northvolt previously said the plant would begin operations in 2026.

A company spokesperson added, however, there would be a revised timeline for plants in Canada and Germany but did not provide further details. Potential revisions to these projects would be confirmed in the fall, Cerutti said.

"Northvolt's strategic review continues, and the right pace of execution for all expansion projects is still under discussion," he said in an email.

"There are no job cuts in Canada and we continue to hire for the jobs opened on our website," Cerutti said.

Last year, Northvolt announced it would invest C$7 billion($5.17 billion) in Canada's Quebec province to set up an electric vehicle battery plant. At the time of announcement, Northvolt said the Canadian federal and provincial government would each contribute $1 billion for the first phase of construction.

Northvolt's other Canadian investors include pension funds such as Investment Management Corporation of Ontario (IMCO), BlackRock and Canada Pension Plan Investment Board (CPP Investments) and CDPQ that have collectively invested around $1.1 billion in the battery maker.

The government of Canadian Prime Minister Justin Trudeau has made EV manufacturing a key plank of its industrial policy, including offering production credits and other support to 13 battery companies and automakers worth C$56 billion ($41.34 billion).

However, a slowdown in the growth of EV demand has led several industry companies to cancel or delay investments totalling C$46 billion ($33.96 billion).

($1 = 1.3547 Canadian dollars)

(Reporting by Divya Rajagopal, editing by Ben Klayman and Sandra Maler)