Lion Electric, a US commercial electric vehicle manufacturer, announced plans to lay off an additional 300 employees and reduce production in response to rising costs and waning demand. This decision follows a nearly 50% year-on-year decline in revenue for the second quarter of 2024.
The company’s ‘Action Plan’ aims “to streamline its operations, further align its cost structure with current demand and improve its liquidity position and ability to reach its profitability goals.” The layoffs, affecting approximately 30% of the workforce across the US and Canada, will impact “all areas of the organization.” The move is expected to save Lion Electric around $25 million annually.
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This marks the second workforce reduction for Lion Electric in recent months, following a 10% cut at the end of last year. In addition to workforce reductions, the company plans to downsize production due to lower-than-anticipated demand for electric trucks in North America. Lion Electric will adopt a “batch-size manufacturing approach,” building vehicles only when they are ordered. The company also intends to sell its LionBattery HD pack to third parties, establishing a new product line.
The LionBattery HD pack, with a capacity of 10 kWh, received certification in June and will be used in the all-electric Class 8 Lion8 tractor, which was unveiled in May. The medium-duty variant received certification in December.
“Transition to electric is taking longer than initially expected, but transportation electrification is here to stay,” said Marc Bedard, CEO-Founder of Lion Electric. “It is with that mindset that we have 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.”
Lion Electric reported its financial results for Q2 2024, with revenue at $30.3 million, down $27.7 million from the same period last year. Sales declined by $12.1 million year-on-year to $45.5 million in Q2 2024. “The decrease was primarily due to lower sales volumes, partially offset by increased manufacturing costs related to the ramp-up of the new products (LionD, Lion5, and the Lion battery packs),” according to the company’s press release.
Lion Electric is known for its electric trucks and school buses, which are popular in the USA and Canada. The company initially focused on heavy-duty electric buses before expanding into truck production.
