SUMMARY
- U.S. Inflation Reduction Act influences Northvolt's swift expansion into North America.
- Northvolt to launch its first-ever lithium-ion gigafactory outside Europe in Quebec by 2026.
- Canadian and U.S. green subsidies lure global companies like Volkswagen to set up shop.
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Swedish battery maker, Northvolt, has made a brisk decision influenced by the U.S. Inflation Reduction Act (often dubbed IRA). This significant climate and tax pact, boasting a cool $300 billion, is not just any deal—it's sprinkled with green subsidies for businesses.
For the car enthusiasts among us, here's a tidbit: electric cars with over half their parts made in North America now have a tax credit badge. This certainly makes them a shiny option for the environmentally-conscious spender. And guess what? Canada, not wanting to miss out on the green parade, has rolled out its own red carpet in the form of loans for Northvolt.
So, what's the big news? Northvolt announced it's setting up a lithium-ion battery gigafactory in Quebec, marking its inaugural venture outside Europe. This powerhouse will have an annual cell manufacturing capacity of a whopping 60 GWh, eyeing its debut in 2026.
Now, if you're thinking, "Why Canada?", here's the gist. The Great White North has recognized the pivotal role batteries will play in the energy transition landscape. And Paolo Cerutti, the co-founder of Northvolt and a Tesla alumnus, suggests that Canada's initiative mirrors the Inflation Reduction Act's spirit. But, he delicately puts it as a "catalyst" rather than the sole motivator.
The price tag on this monumental project? A staggering $5 billion—with Northvolt shouldering $3.2 billion, while Canadian local and federal pockets pitch in $1 billion each.
In a world of expanding horizons, Northvolt isn't the only one venturing into Canadian territory. Volkswagen, the German automaker, announced its own battery cell plant in Canada earlier this year. And back in Europe? Northvolt continues its dance, with a new factory in northern Germany set for 2026, supported by German authorities. It's a tight race to a greener future, and governments worldwide are fueling the pace.
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