Thanks to the billions of taxes we will invest in the coming years, we are firmly entrenched in the mad global rush for batteries for electric vehicles.
Have we lost our minds with this new financial euphoria for battery factories sweeping the United States, many European countries, Canada, including Ontario and now Quebec?
When it comes to governments funding a very large portion of the cost of battery factory projects, there is cause for concern. This also applies to the $7.3 billion being poured into the Northvolt mega-factory, which is being built on the former CIL site in McMasterville and Saint-Basile-Le-Grand. Quebec will provide 2.9 billion and the federal government will provide 4.4 billion. In addition, we have been warned that billions of dollars in government investment will be required later.
THAT SAID…
Allow me to borrow a quote from Albert Einstein that Desjardins’ former chief economist François Dupuis used in a special report on financial crises: “Two things are infinite: the universe and human stupidity.” As for the universe, I have no absolute certainty has been achieved. »
Time and again in history we have experienced phases of euphoria and the formation of speculative bubbles. They all failed and obviously resulted in enormous financial losses, as was particularly the case in the following major financial crises:
- The stock market crash of 1929
- The deflation of the speculative bubble in gold and silver in 1980
- The stock market crash of 1987
- The Japanese stock market crash of 1990
- The deflation of the Internet and telecommunications bubble in 2001
- The commercial paper and subprime financial crisis of 2008
Do not get me wrong. I sincerely hope that the tens of billions of dollars that the government of Justin Trudeau and the governments of François Legault and Doug Ford will invest in mega-battery factories on our behalf will make us major players in the global battery industry. The battery for electric vehicles.
THE POTENTIAL OF NORTHVOLT
It is certainly interesting to see that the Legault government’s $2.9 billion investment in the battery factory project includes a $567 million share of equity from parent company Northvolt AB.
The problem? Minister Pierre Fitzgibbon’s office refuses to disclose what percentage of Northvolt AB’s share capital represents this half billion dollars. But OK…
Founded in 2017, the Swedish battery start-up has increased its fundraising since its inception. Northvolt AB has so far secured around $8 billion in equity and debt capital to implement its development program.
The company plans to go public soon. Several large Canadian pension funds participated in these Northvolt AB fundraising events, with the exception of the Caisse de dépôt etplacement du Québec.
Question: If Northvolt AB’s potential is so promising in the eyes of François Legault and Pierre Fitzgibbon, would you like to tell me why Charles Emond and his great managers at the Caisse missed this great opportunity to invest in Northvolt AB’s capital? invest?
APARTMENTS
Building a factory that creates 3,000 jobs is fabulous on paper. This suggests that communities along Route 116, such as Mont-Saint-Hilaire, Beloeil, McMasterville and Saint-Bruno, are seeing as many or even more new residents arriving.
Where are we going to house all these new workers and their families? And most importantly, at what price? We expect a wave of bidding wars for residential properties in this corner of Montérégie.
What can we say now about the traffic problems that the increase in population will cause on Route 116, which already has enough traffic during rush hours?
In order to make the mega-project of the new Northvolt battery factory more accessible to the environment and thus avoid scrutiny by the Bureau d’audiences publique sur l’environnement (BAPE), the Legault government considered it appropriate to amend the regulation, which focused on the production of cathodes.
How ? Only the threshold for cathode production was raised from 50,000 to 60,000 tons. As luck would have it, the future Northvolt factory is expected to produce 56,000 tons of cathodes.
Northvolt, in turn, will avoid coming under the BAPE’s microscope. In my opinion, such a short-term change is hardly reassuring!
Like the rapid development of technology, the battery will also develop at a rapid pace.
At your own risk!
