Another electric company that builds electric buses has to pump the brakes to avoid further financial losses.
Lion Electric announced on Tuesday that it would have to lay off 30% of its staff, around 300 employees. The company expects to save $25 million annually from the initiative, assuming the laid-off employees are not rehired. The most recent layoffs follow 220 employees previously being laid off in Feb. and Apr.
“Transition to electric is taking longer than initially expected, but transportation electrification is here to stay,” said CEO and Founder of Lion Electric, Marc Bedard. “It is with that mindset that we put together an action plan to adjust our cost structure to enable us to continue to support the increasing electric school bus demand and maintain our leadership position, while allowing us to keep supporting the truck operators in their electric transition and focus on our profitability objectives.”
The action plan includes the anticipated layoffs along with subleasing some facilities, selling battery packs to third parties, and cutting operational expenses such as logistic and consultant costs.
The quarterly financial highlights showcased a gross loss of $15.2 million, compared to a gross profit of $0.4 million in the same period last year. The company reported a net loss of $19.3 million for the second quarter of this year, up from a net loss of $11.8 million in the same period last year.
Lion Electric claims to be “a leading manufacturer of all-electric medium and heavy-duty urban vehicles,” according to the company’s press release. The company has over 2,100 vehicles on the road.
Between the second quarter of 2024 and 2023, the number of vehicles sold was almost cut in half. In the second quarter of 2023, 199 vehicles were “delivered,” compared to only 101 in 2024’s second quarter.
The 199 vehicles sold in 2023 were 166 school buses, 33 trucks, 171 vehicles in Canada, and 28 in the United States. In 2024, these numbers fell to 95 school buses, six trucks, 84 vehicles in Canada, and 17 in the United States.
The New York Stock Exchange informed Lion Electric that its stock price had been below $1 per share for 30 consecutive trading days. The company has six months to raise its share price above $1 to regain compliance. If Lion Electric cannot re-raise its stock price in time, it may be delisted from the exchange.
The federal Liberals have mandated that every vehicle sold in 2035 must be electric.
The Canadian Taxpayers Federation previously urged governments to stop handing out EV subsidies to consumers purchasing electric vehicles. They showed that 57% of electric vehicle owners make more than $100,000 per year, and argued that the average taxpayer with a lesser income shouldn’t be picking up the tab.
As of June 2024, the taxpayers organization highlighted that the feds had handed out $57 billion in subsidies to wealthy auto giants, while Ford reported losing $132,000 on every electric vehicle sold.
True North previously reported that auto dealers warned the 2035 mandate could worsen inflation.
Alberta Premier Danielle Smith warned that the EV mandate was “destructive” and “unachievable.”
A municipality in Saskatchewan previously scrapped the idea of adopting electric vehicles, concluding that they posed too many risks, especially regarding emergency use.
A Consumer Reports survey showed that electric vehicles have 79% more problems than their gas counterparts.
St. Albert and Edmonton previously wasted millions of dollars on electric buses.
The buses have a lifespan of 12 years, originally advertised as 18 years — 33% less than predicted. As of Jan. 2024, 44 of Edmonton’s 60 electric buses were no longer roadworthy. While the charges were advertised as able to go 482km on a single charge, Edmonton’s buses had a range of merely 117km, leaving them charging most of the day.
Conversely, a diesel bus can go 21 hours without filling up its tank.