Lion Électrique: Quebec has no partner “a few hours” before the deadline

No private partner, no public money. No money, no Lion. The Legault government has not yet found a private investor ready to support it in a rescue of the Lion Électrique company a few hours before the deadline.

The manufacturer of electric buses and trucks needs to get its hands on cash to repay part of its debts before Saturday, November 30.

Without adding money, Quebec anticipates that Lion will protect itself from its creditors.

Bad news is expected soonindicates a government source.

The Minister of the Economy, Christine Fréchette, wanted to maintain a little hope Thursday evening in an interview at TV news by Patrice Roy.

It’s not [dirai] not if I’m optimistic or pessimisticshe said. There are a few hours left before the deadline. Let’s see what this latest blitz can do.

The government had made it a condition for any additional financial assistance that a partner accompany it. We won’t go alonesaid the minister Thursday in an interview on the show All one morning.

There are a few organizations and companies that have shown interest. Will it be enough for them to move forward with an investment in the very near future? That remains to be seen.

It’s in the last hours, sometimes, that it endsadded the minister.

Already $227 million in public money in Lion

So far, Quebec has injected $177 million into Lion, and Ottawa, 50 million. Governments would therefore be among the creditors from which Lion would protect itself.

Unfortunately, the company is approaching the abysssays Louis Hébert, full professor in the management department of HEC Montréal. One likely outcome is that someone will come along and buy Lion at a liquidation price.

However, according to our sources, no takeover project has been seriously advanced at the moment.

Lion’s stock was trading at $0.27 late Thursday.

According to our information, subcontractors who manufacture tools and parts inside the Saint-Jérôme factory, in the Laurentians, have already ceased their activities.

Lion management declined our interview requests.

Hoping to cut costs, the company has already laid off more than 500 workers this year, representing 40% of its workforce.

Over the past five years, Lion has been profitable for only one financial year. From 2020 to the third quarter of 2024, its cumulative losses reached US$300 million.

Its debt currently stands at $293 million, while the company has $26 million in cash.

The company sold 386 vehicles from the beginning of January to the end of September, compared to 664 during the same period last year.

To explain the company’s difficulties, its founder, Marc Bédard, has several times blamed the slow deployment of a federal program which offers subsidies to transporters to electrify their vehicle fleet.

Lion planned to sell 500 buses per year to customers who would have benefited from them.

500 vehicles per year for Lion means $150 million in sales. And the program was announced in 2021. It is 2024 and the first 50 deliveries were made in the first quarter of 2024, so there is a significant shortfall that occurred because of that.

Rapid growth that has not yet borne fruit

Facilities in the United States were added to the Saint-Jérôme factory, then a battery factory in Mirabel.

Professor Louis Hébert wonders if it would not have been better for Lion to concentrate on a single product.

Lion still finds himself in this valley of death where we have started production, where we have made all the investments to produce but where we are not yet at the stage where we are able to sell enough to cover our investments.

The company also had problems with its trucks. The Société des alcools du Québec (SAQ) even returned its own, with which it was dissatisfied.

Concerns over bus maintenance

The vast majority of the 1,300 electric school buses currently on the road in Quebec were built by Lion. The prospect of a possible closure of Lion worries carriers.

In terms of vehicle maintenance, compliance with warranties, parts, etc., all these questions are raised by the industry and everyone is very concerned.explains Luc Lafrance, CEO of the Bus Transport Federation.

Minister Christine Fréchette said that the government is special attention to this question and suggested that a maintenance service could be maintained during a transitional periodwith state support, for vehicles already on the roads.

With the collaboration of Aude Garachon