Lion Electric, a Canadian electric vehicle manufacturer known for its electric school buses and commercial vehicles, is facing imminent liquidation after the Quebec government withdrew its support for a public bailout. The decision to cease funding comes despite the regional government’s significant prior investments in the company.
A court-appointed administrator indicated that the likelihood of liquidation is extremely high, following the provincial government’s refusal to invest additional funds into the struggling company. Jean-François Nadon, a restructuring expert with Deloitte, called the government’s decision a “shock wave” for Lion Electric, further exacerbating its dire financial situation.
Premier François Legault of Quebec noted that the provincial government could lose as much as $140 million CAD from its investment in the company. He also hinted that Quebec might ease its electric vehicle targets due to changing priorities in the United States. Nadon agreed, pointing to the limited expansion opportunities for Lion Electric and the associated risks stemming from the evolving geopolitical situation in the U.S.
Founded in 2011 in Saint-Jérôme, Quebec, Lion Electric experienced early success, including opening a manufacturing facility in Illinois and deploying over 1,100 school buses in Quebec. However, the company has struggled with production delays, a sharp decline in revenue, and rising debt. In 2024, Lion’s revenue plummeted to $30.6 million CAD from $80.3 million CAD the previous year, while vehicle deliveries dropped from 245 to just 89.
Lion Electric filed for creditor protection in Canada and Chapter 15 bankruptcy in the U.S. in late 2024, undergoing several rounds of layoffs. The company had hoped to refocus operations on electric school buses and relocate production to Quebec with an additional investment of $20-24 million CAD from the provincial government. But with no financial backing from Quebec, the company has now laid off all but 12 employees and can no longer pay rent on its facilities. With no buyers in sight, Lion Electric’s future remains uncertain, and liquidation appears imminent unless a dramatic change occurs.
Source: cbc.ca, thelionelectric.com