Lion Electric Co. laid off 300 more people or about a third of its workforce Wednesday as the slow rollout of electric school bus subsidies in the United States and Canada caused a sharp drop in revenue.
Wednesday’s job cuts, announced in a news release, mark the company’s fourth round of layoffs since November. Most of them, officials said, will be temporary.
The layoffs affect a significant number of workers at the company’s year-old bus factory in Joliet, according to Chris Tucker, who’s trying to organize the plant for the International Association of Machinists and who’d been in touch with some of its workers Tuesday night and Wednesday.
Marie-Eve Labranche, a spokeswoman, declined to say how many Joliet workers were laid off. But on a conference call, Lion Electric officials said they were indefinitely delaying truck production in Joliet, partly over uncertainty around the future of subsidies after the U.S. presidential election.
Spokespeople for Gov. J.B. Pritzker didn’t return calls. When the Saint-Jerome, Quebec-based company opened its Joliet plant last year, Pritzker welcomed Lion Electric as a harbinger of the state’s decarbonized future.
On the conference call, the company announced several other measures to survive what it described as a short-term cash crunch. These included an additional $5 million loan from an affiliate of Quebec’s provincial government, a debt restructuring that included a delay in interest payments and a new plan to sell its battery packs to outside companies.
Even so, Lion Electric had just $25 million in cash and a revolving loan as of June 30, down from $31 million in the prior quarter.
Officials said that delays in government bus subsidies and slower-than-expected adoption of battery-powered freight trucks are prompting the cash crunch.
In a release, the company predicted deliveries will increase in the coming months as the U.S. Environmental Protection Agency releases more subsidies. It’s also working with the Canadian government to expedite the subsidies.
“Transition to electric is taking longer than initially expected, but transportation electrification is here to stay,” Marc Bedard, Lion Electric’s chief executive officer, said in a statement.
Lion Electric’s Joliet plant operating significantly below capacity as US and Canadian subsidies lag
According to the news release, the bus and truck maker lost $0.09 a share in the second quarter, up from $0.05 a year ago. But that beat the expected loss of $0.12 in a Zacks.com survey of analysts.
Lion Electric delivered 101 vehicles in the United States and Canada during the second quarter, down from 199 in the year-ago period.
Revenue fell 48% during the second quarter to $30.3 million.
As of June 30, the company had 1,994 orders for electric trucks and buses on hand, down slightly from the January-March period.
According to the World Resources Institute, a nonprofit group that promotes sustainable growth, the U.S. EPA had approved nearly $3 billion in clean school bus subsidies in the United States by June 2024.
That’s enough for 8,500 buses, but the institute said that because of the agency’s complex and pandemic-delayed approval process, only about 750 had been delivered by Lion Electric and other manufacturers.
In Canada, spokesman Micaal Ahmed said the government’s Zero Emission Transit Fund has agreed to fund electric bus purchases worth $1.3 billion. That’s about half the amount lawmakers allocated to the fund three years ago.
Meanwhile, former President Donald Trump, the front-runner in his presidential reelection bid according to many pollsters, has promised to end zero-emission subsidies and loosen environmental regulations if he regains the White House.
In Ottawa, the Conservatives could return to power in the fall of 2025 on a campaign promise to axe the federal carbon tax, among other things.
Lion Electric lost $19.3 million in the second quarter, up 64% from its $11.8 million loss in the year-ago period.
Lion Electric’s shares had dropped 18% to 70 cents as of 1:05 p.m. on Wednesday in New York. So far this year, they’re down 60%.
During a recent weekday, the Lion Electric plant in Joliet had 100 parked cars for workers and visitors.
While speaking at a triumphant ribbon-cutting a year ago, Pritzker said 1,400 jobs were coming.
