What you need to know:
- Nearly 2,000 Lion Electric school buses in the U.S. have lost their manufacturer warranties after the company’s bankruptcy and restructuring.
- Deloitte Restructuring confirmed that all warranties and purchase orders outside Quebec are null and void.
- Many of the buses were purchased using grants from the Biden-era Clean School Bus Program.
- The EPA declined comment, citing potential litigation and referring inquiries to the DOJ (which has not announced any investigation).
Nearly 2,000 Lion Electric school buses in the U.S. have had their manufacturer warranties voided following the company’s bankruptcy and subsequent reorganization earlier this year.
The news was confirmed earlier this month when Deloitte Restructuring issued a letter to Lion's U.S. bus customers stating that all previous warranties for all purchases made outside of Quebec are null and void.
"As part of the transaction, most of the Lion Group assets, liabilities, and rights were transferred to a corporation that will be eventually wound-up by way of bankruptcy proceedings. For further clarification, all warranties and purchase orders in the United States were transferred into the new corporation to be bankrupted. All warranties and purchase orders that you could have with the Lion Group are therefore not being legally assumed by the company post transaction."
The letter can be read in its entirety here.
Quebec school district warranties, however, remained unaffected.
Many of these U.S. school districts, two of whom spoke to Clean Trucking, were encouraged to purchase zero-emission buses with grants provided by the Biden era Bipartisan Infrastructure Law's $5 billion Clean School Bus Program. They are now stuck with non-functional vehicles following a series of significant mechanical, operational, and safety failures, such as the loss of power steering.
[Related: School districts reveal technical, safety issues with Lion Electric EV buses]
The NHTSA has issued several safety recalls for the LionC bus specifically for potential parking brake malfunctions, high-voltage system failures, and reversed brake connections. One school district told us "the electric infrastructure cannot heat the bus when external temperatures are below 35 degrees Fahrenheit."
The company's solution, a technician-installed auxiliary diesel heater, also failed.
What now for U.S. customers?
With the nullified warranty letter in hand, U.S. school districts that purchased taxpayer-funded, defective Lion buses to replace aging diesel models are now in a difficult position.
One superintendent who confirmed receiving LION's letter and wished anonymity, said "At this time, we’re reviewing our options and assessing the implications for our fleet."
Asked why they thought the EPA didn't perform due diligence before approving Lion's buses for the Clean School Bus Program, the superintendent "thinks [the EPA] hurried. Some buses were clearly better than others and perhaps in the rush to get them out to schools, they may have overlooked the appropriate processes."
The EPA stopped accepting applications to the 2024 CSB Rebate Program last January, but funding has been secured (for now) through 2026.
Quebec's bad investment
Canadian media is reporting that Quebec's auditor general is investigating the millions of dollars in subsidies given by the province to the emerging electric vehicle industry, including Lion Electric.
No precise details of the investigation have been provided but a full report is due by next spring.
Quebec invested about $177 million CAD in Lion while the Ottawa government chipped in another $30 million CAD. The investors paid a reported $6 million CAD for the company.
What says LION and the EPA?
LION did not reply to our request for comment regarding the null and void warranty.
The EPA previously referred Clean Trucking to the Department of Justice's Office of Public Affairs regarding Lion Electric due to possible "pending litigation" and "has nothing further to add."
To date, the DOJ has not announced an investigation into Lion Electric.
