Lion Électrique has twice benefited from subsidies for defective trucks

Lion Electric has found a way to benefit twice from generous subsidies – up to $480,000 per vehicle – for defective trucks returned by dissatisfied customers.

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According to information obtained by The JournalLion offered around twenty customers the opportunity to take back their truck that was not working well and replace it with a new vehicle.

The problem is that in the process, Lion benefited a second time from the subsidies offered by Quebec and Ottawa, which is nevertheless prohibited.

“It won’t cost you anything”

“Customers were told: ‘It won’t cost you anything’,” says a former Lion Électrique employee who requested anonymity.

The modus operandi was as follows: the manufacturer bought the customer’s defective truck for around $100,000, then sold him a new one at the same price.

The customer received subsidies from Quebec and Ottawa, approximately $240,000 in total, for this “purchase”, so that the replacement vehicle, whose price displayed was approximately $340,000, cost him nothing. , except taxes.

For Lion, the process had two advantages: it made it possible to satisfy, at least in part, a dissatisfied customer, while generating a new sale which improved the company’s quarterly results.

The rules are clear

However, the Quebec Ministry of Transport, responsible for the Écocamionnage subsidy program, confirmed to Journal that this way of doing things did not respect the rules.

These stipulate that “subsidized technology […] cannot be sold […] without the minister being notified in advance, and this, for a minimum period of three years from the date of acquisition,” specified a spokesperson for the ministry, Émilie Lord.

When a manufacturer decides to replace a defective vehicle, the “new vehicle will not be able to receive financial assistance since it is not an additional vehicle, but rather a vehicle which replaces a defective vehicle already subsidized “, she added.

M^me Lord, however, indicated that the government had not, so far, “imposed sanctions” on companies for such offenses.

For its part, the Federal Ministry of Transport did not want to say whether Lion’s maneuver contravened the rules.

The height of irony is that several customers who received replacement trucks were still not satisfied, so that their vehicles, subsidized twice, ultimately saw little use.

Asked to react, Lion Électrique did not respond to Journal.

“We knew for a year and a half that we were going into trouble”

Lion Electric’s trucks were so poorly designed that the company is unlikely to be able to continue marketing them, former employees told the Journal.

“We knew for a year and a half that we were going into trouble,” says a former employee, speaking on condition of anonymity. We were no longer able to sell trucks because customers no longer wanted them.”

One example among others: the giant Amazon, which was ready to buy up to 2,500 Lion trucks in 2021, ended the adventure after receiving barely five vehicles.

“I don’t see how Lion will be able to continue the truck component with the competition currently coming from the big players,” adds the ex-employee. It’s not sustainable.”

Dismissed workers

He notes that almost all workers in the truck sector lost their jobs as part of the layoff of 400 employees announced by Lion at the beginning of the month.

According to him, Lion “digging its hole” by going public in 2021, which led the company, then known for its school buses, to want to move too quickly in the development of its trucks.

“We had to get out of the trucks,” he said. We couldn’t afford to test them for months. We therefore put vehicles on the road which were not reliable, which did not work.

Improvisation

“We launched into a product that no one really knew about and we did it wrong,” adds another ex-employee. Customers are accustomed to having a certain reliability for their vehicles. At Lion, we had to improvise for elements like heating, air conditioning, braking, defrosting, structure… These are things that the big manufacturers have mastered for years.”

Unlike Lion, established companies like Peterbilt can finance the development of their electric trucks with sales of combustion vehicles. They can also offer replacement diesel trucks when an electric vehicle has problems, which reassures customers.