December 04, 2024

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Dignitaries and construction personnel gather for the groundbreaking ceremony of the $880 million cathode manufacturing facility in Quebec, a collaborative investment by Ford, EcoProBM, and SK On, on Aug. 17 last year. (Ford)

Construction of a cathode material plant in Becancour, Quebec -- a joint venture between Korea’s EcoPro BM, SK On, and US automaker Ford -- has been halted for the second time this year, amid growing uncertainty surrounding Ford’s electric vehicle strategy.

The plant's construction began in August last year and was initially paused in April this year due to issues with selecting a contractor and finalizing the facility’s design. At the time, Francois Legault, the Premier of Quebec, explained that the April delay was necessary to carefully analyze the best technological options for the plant’s chemical processes, ensuring that the facility would be equipped to meet future needs.

While work resumed a month later in late May, Canada’s French newspaper La Presse reported last Wednesday that the project has come to a standstill since Aug. 5, this time due to a redesign of the facility. This redesign is not just a minor tweak but part of a larger reevaluation of the companies’ approach, as they grapple with the evolving challenges in the electric vehicle market.

A spokesperson for EcoPro CAM Canada, the local subsidiary managing the project, cited the EV chasm and changes in battery demand as key reasons for the reevaluation. The spokesperson assured that construction will continue once the redesign is finalized.

According to La Presse, the project partners have been facing significant financial pressures due to declining demand and the shifting dynamics of the automotive industry’s transition to electrification.

The Becancour facility is a substantial investment, with the three companies committing approximately $880 million to the project. Originally, the target was to have the plant up and running by the first half of 2026, but with the latest delay, this timeline has now been pushed to 2027.

The root of this delay appears to be Ford’s shifting priorities within the electric vehicle sector. Recently, the automaker decided to slow down its development of larger electric vehicles, including revisiting its production plans for large electric pickup trucks and pausing investments in facilities for large electric SUVs in Ontario.

This pivot has led to speculation that a disagreement may be brewing between Ford and its Korean partners. According to the report, EcoPro BM is eager to get construction back on track, ideally by September, but Ford’s indecision has left them in limbo.

Gregory Patience, a researcher from Polytechnique Montreal, Montreal's research-focused engineering school, told La Presse, "It is highly unusual to reverse a plant design after it has been finalized. Ford seems uncertain about its vision, still vacillating between internal combustion engine vehicles and electric vehicles."

The Quebec government remains optimistic. Mathieu St-Amand, communications director at the ministry of economy, innovation, and energy, said that while there’s been a temporary pause, the ministry believes the project will get back on track in the coming weeks.

By Moon Joon-hyun (mjh@heraldcorp.com)