Lion Electric is not starting 2025 the way it initially hoped.
The already-struggling Quebec-based manufacturer of battery-electric Class 6 and 8 tractors and school buses has announced yet another workforce reduction with a temporary layoff of approximately 150 employees across all departments in both Canada and the U.S.
[Related: Lion Electric suspends Illinois plant production, lays off hundreds]
This leaves only around 160 employees who are now tasked with handling all company functions including customer relations and maintenance issues for fleet customers of its trucks and school buses.
The company says it had no choice but to execute these additional layoffs due to ongoing proceedings under Canada's Companies' Creditors Arrangement Act (CCAA), which is similar to Chapter 11 of the U.S. Bankruptcy Code. The CCAA's terms and conditions of the debtor-in-possession (DIP) financing provided by lenders under Lion's senior revolving credit agreement stipulate this latest workforce reduction needs to happen in order to fund the sale and investment solicitation process (SISP) currently underway. These measures are designed to ensure Lion's operations can continue during its financial reorganization.
These proceedings following a Superior Court of Quebec order on December 18, 2024 granting the company and its subsidiaries creditor protection under the CCAA. The company had a December 16 deadline to secure a business partner in order to continue receiving public funds from the Coalition Avenir Quebec government.
[Related: Lion Electric files for bankruptcy protection]
Trading ended last month in Lion's common shares on the Toronto (TSX) and New York (NYSE) stock exchanges.
Also last month, Lion temporarily laid off more than half of its then-remaining workforce, fired its president, and stopped production at its brand-new 900,000 square-foot Joliet, Illinois school bus factory.
The factory, located about 50 miles from Chicago, opened in July 2023 and is the largest U.S.-based facility solely dedicated to all-electric medium- and heavy-duty vehicle manufacturing. It's capable of producing around 20,000 vehicles annually. Illinois Gov. J.B. Pritzker, an advocate of zero-emission vehicles, was present for the factory's opening ceremony and has recently expressed disappointment in Lion's lack of progress.
[Related: Illinois Gov 'disappointed' in struggling Lion Electric, blames Trump]
The Quebec government has invested about $177 million CAD into Lion while Ottawa provided another $30 million CAD. Pritzker confirmed Lion has not received any state funds and this will remain the situation for now. The company says it sold 771 school buses and 81 trucks in 2023. However, those figures dipped by Q2 2024 when Lion delivered 101 vehicles, a 98-vehicle decrease from the same period in 2023.
