TORONTO — German chemical giant BASF has suspended its electric vehicle investment in Canada, The Logic has learned.

The company signed a deal to secure a site in Bécancour, Que., in 2022, with the goal of opening a battery materials factory in 2025. The company has reined in spending since autumn, particularly in its battery business.

That cost-cutting plan and ongoing market uncertainty prompted the company to suspend its investment, spokesperson Daniela Rechenberger told The Logic. 

“BASF will be ready to invest in North America, as soon as the market and customers need such local capacity,” Rechenberger said.

The suspension is another blow to Canada’s struggling EV battery sector. BASF had hoped to recycle batteries in Quebec and make cathode active materials, a valuable part of the battery that charges the positive pole. The firm never disclosed how much it was spending in Bécancour; while it was reportedly in talks with the federal government’s Strategic Innovation Fund, the government never announced an agreement.

When the project was announced in 2022, there were high hopes of further deals with local lithium, nickel and cobalt companies. But the project has languished. 

BASF reportedly struggled to find automotive partners for the project. In October and November 2023, Pierre Fitzgibbon, Quebec’s economy minister, said he had not heard from the company in a long time and thought the project was likely “on ice” given the lack of activity at the construction site. At the time, Fitzgibbon assured Quebeckers that there were plenty of other projects to fill the Bécancour battery belt if BASF bailed.

By January 2024, BASF had begun looking into other sites in North America but was quiet on its future plans for Quebec. 

Amid the slow-motion demise of the BASF project, though, other investments in Canada’s EV sector have also found themselves “on ice.” Northvolt, as part of its parent company’s U.S. bankruptcy, has postponed work on its Quebec plant. South Korea’s EcoPro put its Bécancour plant on hiatus in February.

“Right now, everybody in the industry is taking a step back,” BASF CEO Markus Kamieth said at the firm’s capital markets day in September 2024, citing dramatic policy shifts outside of China in the past two years. “We have now deprioritized new investments and building new plants because our customers, cell manufacturers in this industry, have done the same,” he added.

BASF, which was founded as dye company Badische Anilin- & Sodafabrik in 1865, has about 1,100 workers across its 10 other businesses in Canada, which generated about $2.6 billion in sales last year. It signed a deal last month to work with the University of Toronto on agriculture and chemistry research and hopes to qualify for “significant cost savings through government matching funds and tax incentives.”