Half of Lion Électrique’s order book for school buses outside Quebec depends on federal subsidies. However, if Ottawa is ready to move forward with part of these amounts, the majority has been overdue for more than two years. Result: these orders are on ice and the manufacturer says it is suffering. Thursday, the company announced the layoff of 100 employees at its Saint-Jérôme plant, in addition to posting a net loss of more than $100 million for the year that has just passed.
“We have orders for approximately 1,200 vehicles that cannot move forward,” argues the founder and CEO of Lion Électrique, Marc Bédard, in an interview with Duty.
These come from outside Quebec and are conditional on obtaining subsidies from the Zero Emission Public Transport Fund. This federal fund has an envelope of $2.75 billion over five years and can cover up to 50% of the financing of eligible projects.
“In fact, to our knowledge, unfortunately no electric school bus has been approved under this program to date,” says Mr. Bédard, who deplores the processing delays.
In fact, a conditional order for 200 LionC buses, placed by the Ontario carrier Langs Bus Lines in December 2021, received a first subsidy offer last September by Infrastructure Canada. In a letter dating from December The duty obtained a copy, Ottawa reiterated its offer.
Langs Bus Lines and Infrastructure Canada have not reached a final agreement to date. A source at the ministry argues that the delay in this file is not attributable to the federal government and believes that the carrier would be ready to move forward with the terms of the current contract.
However, another much larger order has not yet qualified for the federal program: this is the conditional order for 1,000 LionC buses placed in October 2021 by the Student Transportation of Canada organization. The file is still under analysis.
“These pending orders are just the tip of the iceberg,” argues Mr. Bédard. “There are many operators who want to place orders in the rest of Canada today, but who are waiting for approval from the Ministry of Infrastructure to place their orders. »
Layoffs and losses
On Thursday, Lion Électrique laid off 100 employees at its Saint-Jérôme factory, in the Laurentians. The company made the announcement during the presentation of its financial results for the fourth quarter of 2023 and for the entire financial year.
“We are eliminating evening shifts until the subsidies linked to the program are approved,” explains Mr. Bédard in an interview. ” It’s very sad. But how can we pay employees when we are missing this entire portion of income? We cannot put the company in difficulty,” argues the company manager. Until then, production continues, but the “rate is temporarily reduced under the circumstances”.
These layoffs are in addition to the 150 layoffs announced last fall.
In the fourth quarter of 2023, Lion Electric’s net loss was $56.5 million, compared to a loss of $4.6 million in the same period a year earlier. For the full year, its net loss amounts to $103.8 million, compared to a net profit of $17.8 million for fiscal 2022. The company delivered 852 vehicles in the last year, which is 333 more than the 519 vehicles delivered during the previous financial year.
Lion Electric’s shares plummeted on the Toronto Stock Exchange following these announcements. When the markets closed on Thursday, it was worth $1.99, or 12.7% less than at the start of the day.