The axe has fallen again at Lion Électrique: for the third time this year, the Quebec manufacturer of medium- and heavy-duty electric urban vehicles is cutting its workforce, reducing its workforce by 30%.
When announcing a new financial loss for its second quarter on Wednesday, the Saint-Jérôme company indicated that this new “action plan” provides for the elimination of approximately 300 jobs in Canada and the United States.
“All sectors of the organization” will be affected by these cuts, it was announced. The plan is expected to be implemented “over the next few days” and will result “mainly in temporary layoffs.”
The company estimates it could achieve annualized cost savings of up to about $25 million from the layoffs, “assuming the temporarily laid-off employees are not rehired.”
Lion announced in April the elimination of 120 jobs, mainly based in Canada, in corporate and product development functions. The company also proceeded in February to lay off about 100 employees working mainly during the night shift at its Saint-Jérôme plant.
In the second quarter, which ended June 30, Lion’s net loss was US$19.3 million, compared with a loss of US$11.8 million in the same period last year. In the first quarter, the company had a net loss of US$21.7 million.
Faced with this difficult financial situation, the manufacturer announced at the beginning of the month that it had concluded a new agreement with Investissement Québec providing for a loan of up to $7.5 million, as well as new arrangements with its private lenders.
In a statement, Lion CEO Marc Bédard acknowledged Wednesday that the electric vehicle market is currently facing “significant challenges.”
“It is with this in mind that we have developed an action plan to adjust our cost structure to enable us to continue to meet the growing demand for electric school buses and maintain our leadership position, while continuing to support truck operators in their transition to electrification and focusing on our profitability objectives,” he said.
In the second quarter, Lion delivered 101 vehicles, 98 fewer than in the second quarter of 2023. Its revenue was also down, from US$58 million in the second quarter of 2023 to US$30.3 million in the second quarter of 2024.
As of Tuesday, Lion’s order book included 1,994 medium- and heavy-duty all-electric urban vehicles, including 190 trucks and 1,804 buses, for a combined total order value of approximately $475 million, according to management estimates.