A new subsidy for electric school buses in Quebec has given flailing electric bus and truck manufacturer Lion Electric a fresh commercial forecast and a raft of fresh pile of real estate cash to swim around in.
Lion Electric has racked up nearly $250 million in debts, laid off hundreds of employees in two countries, and left several school districts on the hook with uncertain POs or, in some cases, bricked buses. The once-promising electric bus manufacturer’s downturn has been such that Bragel Eagel & Squire, P.C., a New York-based law firm specializing in shareholder rights law, is investigating the Quebec-based manufacturer due to concerns that it, “violated federal securities laws and/or engaged in other unlawful business practices.” Sharp-eyed observers of Lion’s fortunes will note that that’s a separate lawsuit from the one announced by Bronstein, Gewirtz, & Grossman, LLC., which also suspects Lion committed federal securities fraud.
Things are super bad for the Canadian HDEV startup, in other words. But it seems that all is not lost for Lion Electric.
A government incentive for electric school buses that expired in March is set to be reinstated, opening the door for more electric bus sales in Quebec, where the company has a genuine foothold (nearly 1,200 of the 1,600 existing electric school buses are already wearing Lion badges).
The new rebate program is being seen by some as a response to Trump’s proposed tariffs on electric vehicles built in Canada. Under the details, new Lion Electric school buses may receive up to $240,000 in incentive funding (up from the previous cap of $175,000), that an American-made Blue Bird or Thomas Built would, presumably, not.
That fresh hope was enough to convince Vincent Chiara, president of Quebec real estate powerhouse Groupe MACH, and Pierre Wilkie, a director on Lion Electric’s board, to start shoveling more money into Lion. The exact dollar amounts haven’t been released, but while there’s enough money there for the company to retain its Canadian manufacturing facility in St-Jérôme, there is very pointedly not enough to reopen the company’s factory in Joliet, Illinois.
“It wasn’t easy to get to where we are this morning,” said Guy Martel, a lawyer representing Lion Electric, during a court hearing on May 16. “It’s a result, but it’s still not what we had hoped for at the very beginning of the process.”
No word yet on how the fresh investment will impact the two lawsuits, or the looming SEC SPAC investigation, or repair the Lion Electric buses that have been sitting idle – but some hope is better than none.
SOURCE | IMAGES: Electric Autonomy.
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Author: Jo Borrás
Source: Electrek
