Northvolt filed for U.S. bankruptcy protection on Thursday, but has so far left its Quebec subsidiary intact and insists it plans to continue building its gigafactory there.

Paolo Cerruti, one of the founders of Northvolt and its North American CEO, said that it would continue work on its $7 billion complex outside Montreal, adding the Quebec facility “is a key part of the company’s future and we remain fully committed to seeing it through.”

Yet the filing casts doubt on such plans and raises questions about how the Swedish electric-vehicle battery maker plans to keep afloat long enough to make good on its promises in Canada.

In its bankruptcy filing, Northvolt said gigafactories in Quebec and Germany had been postponed but noted that the “well-funded and permitted projects” remained part of the company’s plans. It added it was searching for partners to fund its operations going forward.

Northvolt and its other subsidiaries, including those in California, Texas and Poland, owe its creditors between US$1 billion to US$10 billion, according to the Chapter 11 filing in Texas’s southern district bankruptcy court. Volkswagen appears to have the most at stake in the process, dominating the list of creditors, which includes firms like BMW, Siemens, ABB and West Street Capital partners.

The list, which also includes scores of redacted creditors, also includes Quebec battery-recycling startup Lithion, as well as an entity associated with Ontario Municipal Employees’ Retirement System (OMERS). Quebec’s public pension fund manager Caisse de dépôt invested roughly $200 million in Northvolt in November 2023. “Naturally, we are watching the situation very closely and are in constant communication with the company. Because the case is before the courts, we can’t comment further,” Caisse spokesperson Jean-Benoît Houde told The Logic.

Quebec Premier François Legault’s office nor a spokesperson for Innovation minister Christine Frechette responded to emailed questions ahead of publication. Nor did Investissement Québec, which has invested $510 million in Northvolt’s battery production facility in the province. 

Northvolt spokesperson Laurent Therrien told The Logic that these investments—as well as those by Investment Management Corporation of Ontario (IMCO), and Canada Pension Plan Investment Board, which are not listed in the Ch. 11 filings—were all made directly in parent company Northvolt AB, the entity affected by the U.S. bankruptcy filing. 

OMERS, IMCO and CPP, which invested at least $55 million, declined to comment.

Absent from the filing is Northvolt North America and the other subsidiaries registered in Quebec’s registre des entreprises. In a statement, the company re-affirmed its commitment to construct its battery factory in Quebec, and said it is continuing to pay suppliers and workers there. Therrien said that the Quebec factory is funded entirely through Northvolt North America, which is excluded from the U.S. bankruptcy filing and is not planning to file for bankruptcy in a separate process.

Northvolt Six, the Quebec factory, has about US$240 million in cash, the filing said. 

A lot is riding on keeping that plant above the fray, even as the rest of the company crumbles. Northvolt says its contracts with Quebec suppliers and construction firms are worth $200 million. Companies like mining giant Vale have committed to making battery metals in Canada, depending on Northvolt as a customer. 

When Northvolt’s strategic review was underway in September, Canada’s federal government said it has not paid out any of its share of its subsidies to Northvolt, which total about $7.3 billion when combined with provincial funding. The Quebec government said it has given Northvolt a $270-million convertible debenture. 

In September, outgoing Quebec innovation minister Pierre Fitzgibbon told The Logic that a $240-million Northvolt loan by the province was secured by the 170-hectare piece of land on which the company is building its battery plant. Fitzgibbon said the province could sell that land for the same amount in the event of Northvolt’s bankruptcy.

Federal Innovation Minister François-Philippe Champagne discussed Northvolt with Swedish Deputy Prime Minister Ebba Busch on Thursday, his office said, and has been in touch with Cerruti, who has offered assurances. Reuters reported that the Canadian government would not be offering future funding to Northvolt.

“This deal was negotiated with the best interests of Canadian taxpayers in mind, and we can confirm that there has not been any federal funding dispensed to Northvolt thus far,” spokesperson Audrey Milette said.

In an interview conducted shortly before Northvolt filed for bankruptcy protection, Jönköping International Business School digital business professor Christian Sandström said it has been an open question as to whether the company could make payroll from week to week.

The filings paint a clearer picture of how difficult it has been for companies to build profitable businesses without relying on Chinese battery technology, after most car companies in Europe and North America overestimated how quickly and cheaply they could sell EVs by a wide margin. 

Sandström said Northvolt’s battery site in Skellefteå, about 850 kilometres north of Stockholm,  is heavily dependent on Chinese suppliers. “They have about 200 guest workers from China who are there. The labels are in Chinese. The manuals, the screens are in Chinese. Swedish workers use Google Translate to understand what the hell is written on the signs,” Sandström said. 

The bankruptcy filings list at least two China-based vendors and creditors. 

Northvolt is hoping the bankruptcy process will help salvage what’s left of a company that was viewed as a disruptive leader in the West’s quest to electrify vehicles. The firm said the bankruptcy protection process will “appropriately scale the business to current customer needs” and access about US$145 million in cash collateral, on top of about US$100 million in new specialized financing for businesses that are restructuring, paid by one of its customers. 

For now, all eyes will turn to Quebec, which may become one of Northvolt’s last chances to prove to customers and investors that it can deliver on its promise.