Interview with Pierre Fitzgibbon | The battery industry comes back down to earth

After the excitement, the slowdown. Delays are inevitable in the battery sector with the decline in growth in electric vehicle sales. However, Quebec says that no project is at risk of being disconnected and that most of the money offered to companies that came to set up here has not been disbursed. An update with Minister Pierre Fitzgibbon.

“We are seeing a slowdown, there is no doubt about it,” confirmed the Minister of Economy, Innovation and Energy, Pierre Fitzgibbon, in an interview with The Press. “We see a readjustment of certain players on the composition of the batteries, on the volume [de production]. »

After several months of less than positive news in the Quebec ecosystem, the minister wanted to take stock to ensure that there was no imminent danger. Of the $3.5 billion promised by Quebec to get the sector off the ground, $820 million has so far been disbursed. Two projects are taking the lion’s share: Nemaska ​​Lithium ($322 million) and Northvolt ($440 million).

Mr Fitzgibbon points out that the money is only paid out as projects progress. “In a doomsday scenario, I think the losses would be relatively small.”

Globally, automotive giants are moderating their electrification ambitions. This situation is reflected in project postponements or cancellations almost everywhere. The projects announced since the establishment of the Quebec ecosystem – which represent a total sum of 16.5 billion – are not at risk.

However, this scenario cannot be ruled out, he agrees. After all, the project for a cathode plant – the positive pole of a lithium-ion battery – announced with great fanfare by the chemical giant BASF in Bécancour in 2022 fell through barely a year later.

It is mainly on the cathode manufacturers side that the brakes are likely to be observed. For example, last August, the construction site of the plant planned by Ford and its South Korean partners was put on ice for the second time in four months. This plant is expected to start up in 2026. Added to this is the delay of the Northvolt mega-plant in Quebec.

Read “Northvolt eases off, up to 18 months late in Quebec”

Refocusing expectations

When confirming Northvolt’s arrival in Quebec in September 2023, the Legault government was dangling additional announcements that could represent investments of $15 billion. Here too, expectations must be tempered.

“To be more precise, we estimate that there are around 5 billion dollars for a dozen projects that we think it is realistic to announce within 12 to 18 months, unless there is a delay that is much greater than what we can anticipate,” says Mr. Fitzgibbon.

This demonstrates, in his opinion, that Quebec remains an interesting welcoming land.

The minister claims to have a “dashboard” showing 124 projects, representing potential investments of 36 billion.

“It’s a figure that I have never published because there are low-probability projects in there,” he said, specifying that none of these projects should be announced “in the next two or three years at least.”

Charles Séguin, professor of economics at the Université du Québec à Montréal (UQAM), is not surprised by the slowdown in the sector. However, it is not the swan field of the sector, according to him. “It is a question of economic circumstances. At present, there is a slowdown in the demand for electric cars. The most enthusiastic have already all bought them and we are reaching a clientele that is more difficult to convince.”

He also points out that the economy is slowing down and that the falling price of raw materials is stagnating the mining projects that are supposed to power these factories: “The need for electric transport will be there in a few years. Are there any battery factory projects that could die because of that? I don’t know.”

Yan Cimon, full professor of strategy at the Faculty of Administrative Sciences at Université Laval, echoed the same sentiment: “Obviously, in sectors where things are moving, there are definitely things like that.” [des retards] that are going to happen. Shutdowns, restarts, layoffs, companies that are going to change their minds. That’s not unusual in an industry with a high degree of innovation.”

Three flagship projects

Northvolt

The $7 billion project was supposed to start manufacturing battery cells in 2027, but it will be later than expected. In addition to production subsidies – money that has not been disbursed – Quebec offered $1.37 billion to finance the construction of the complex. $440 million has been disbursed so far.

EcoCAM Canada (Ford)

Announced with great fanfare a year ago, this $1.3 billion project is on ice for the second time in three months. Everything indicates that the 2026 deadline for commissioning the cathode plant will be pushed back. The Legault government has not yet paid anything of the approximately $320 million offered.

Ultium CAM (General Motors)

This cathode plant seems able to start up next year, as planned. Announced in 2022, this project is estimated at 600 million and the Legault government is ready to advance 152 million. However, the payments have not started.