Lion Électrique, a Quebec government-subsidized manufacturer of electric buses and trucks, had another difficult day as the company temporarily laid off 100 employees while reporting a financial loss of $56.5 million on its fourth-quarter results recorded in 2023.
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Delays in processing Zero Emissions Transit Fund (FTCZE) grant applications are believed to be largely responsible for these layoffs. The aim of this program is to promote the electrification of public transport and school children. Several school bus orders in Canada were conditional on receiving grants from this fund.
“It has a big impact on us,” Lion Électrique president and CEO Marc Bédard added to the Journal. This puts us in a really difficult situation. There is currently no agreement between school operators and the Ministry of Infrastructure within the framework of this program. Therefore, there are no electric school vehicles to deliver outside of Quebec.”
Evening workers are particularly affected by the temporary cuts. They learned the bad news on Wednesday evening when they arrived at the factory in Saint-Jérôme. They were picked up and sent home. On some days, employees also suffered the same fate.
This news comes a few months after the layoff of 150 employees, or 10% of the workforce. The areas affected were production, manufacturing, product development and administration in Canada and the United States.
More losses
With losses of 56.5 million, the fourth quarter result is not exactly rosy. There was a 30% increase in sales to $60 million. We are far from the 100 million that analysts were predicting.
In total, Lion delivered 188 vehicles in October, November and December.
“We invested a lot in the factory we built in the United States,” says Mr. Bédard. With our fully paid infrastructure we can produce up to 5,000 vehicles per year. It takes volume to make the operation profitable.”
It didn't take long for the stock markets to react to this bad news. Lion Electric shares lost 15% of their value to trade at $1.93.
Storm in a teacup?
Lion Electric buses have experienced technical problems in Maine and Newfoundland in recent weeks.
In Newfoundland, drivers noticed a lack of reliability in the heating system, according to Radio-Canada. Due to the cold, the windows become covered with frost and the air compressor may freeze.
In Maine, the Ministry of Education has temporarily taken the Quebec manufacturer's buses off the road due to several manufacturing defects, according to La Presse. These included problems with the windshield seal, missing screws on the body and problems with the steering column.
“It’s a storm in a teacup,” explains Mr. Bédard. There was a problem, but nothing that could alarm the population. We took care of it. In recent days, the state of Maine gave the green light to get vehicles back on the road. They can all ride.”
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