Quebec EV company Lion Electric made big promises, but struggled to deliver

MONTREAL — A Quebec company once hailed as a success story in the electric-vehicle transition has struggled to deliver on many of its most ambitious plans.

Lion Electric Co. made a name for itself selling electric school buses in Canada and the United States. It later targeted the commercial truck market, advertising agreements with Amazon, Canadian National Railway and IKEA.

Headquartered in St-Jérôme, Que., the company opened its first U.S. plant in Illinois in 2023, with an estimated capacity of 20,000 vehicles per year. The Quebec government has invested $177 million in the company, once a star of the province’s EV aspirations.

But the results have fallen short. To date, Lion Electric has about 2,200 vehicles on the road, mostly school buses. After several rounds of layoffs last year, the company shut down production at the Illinois plant and sought creditor protection in December.

With US$500 million in debt, Lion is seeking a buyer with a restructuring plan that would focus only on school buses and return all manufacturing to Quebec. The company will be back in court Friday morning to request an extension of creditor protection until April 4.

Many of the company’s individual investors allege they were misled by the rosy picture Lion painted in news releases and earnings calls. Adam Mulhall, a member of Invest-Lion, a group of more than 2,600 frustrated investors, said it was “completely shocking” to watch everything fall apart so quickly.

“I really believed in this company,” he said. “I have been such an advocate for this business since the day I invested. I told friends, I told colleagues about it.” Mulhall, who lives in an off-island suburb of Montreal, said he invested $75,000 in Lion Electric.

Lion Electric did not immediately respond to an interview request for this story. The company has said it complies with its disclosure obligations.

Many of the biggest deals Lion announced have not yielded the desired results. The company entered a purchase agreement with Amazon in June 2020 for up to 2,500 trucks over five years. But the agreement didn’t require the online retail giant to buy a minimum number of trucks. Amazon says it has so far purchased 10 trucks from Lion.

In August 2020, Lion announced what it called its “largest order to date” — a memorandum of understanding with CN for 50 zero-emission trucks. But in a recent statement, CN said it “has not received any Lion Electric trucks.”

As it moved into the electric truck market, Lion also publicized plans to build a wide range of specialty vehicles using Lion chassis. In 2019, the company announced a $16-million pilot project with six other Quebec businesses to build all-electric ambulances, garbage trucks, bucket trucks and other heavy-duty vehicles. The Quebec government contributed nearly $8 million.

The outcome has been mixed. Lion announced in 2020 its first sales of electric garbage trucks to Waste Connections, Inc., to be used in Washington and Florida. The trucks were built with Lévis, Que.-based Boivin Evolution.

In an email, business development manager Denis Boivin said the company’s partnership with Lion ended in June 2023 due to “various issues related to Lion trucks.” He said Waste Connections returned the two trucks, and Boivin Evolution reinstalled their electric tippers onto diesel trucks and resold them.

“Since then, we have no longer had any contact with Lion,” he said. Waste Connections did not respond to requests for comment.

Lion did build an electric ambulance in partnership with Demers Ambulances, based in Beloeil, Que. A 2021 news release suggested they could deploy at least 1,500 ambulances over the next five years, but the results so far have been modest. A first unit was recently delivered to Urgences-santé, Montreal’s paramedic service, and is undergoing testing.

Meanwhile, Hydro-Québec uses three Lion Electric bucket trucks, while New York utility Con Edison uses one.

Last summer, Lion delivered an all-electric tow truck to CAA-Québec, which billed it as the first of its kind in North America. This week, a CAA spokesperson said the truck is still in testing, and the organization has been working with Lion to resolve certain issues.

The bulk of Lion Electric vehicles on the road today — roughly 2,000 — are school buses. The company says it has a 33-per-cent market share of electric school buses across North America, with deliveries in 28 states and six provinces. About 1,175 of its buses are in Quebec, where the government requires all new school bus purchases to be electric, and offers grants to help cover the cost.

The federal government also has a fund to help purchase 5,000 zero-emission buses across Canada. However, Lion has long complained about the program being slow to get cash out the door, and some of the company’s biggest school bus orders have not materialized.

In 2021, Lion announced an order of 1,000 buses from Student Transportation of Canada, or STC. In 2023, it announced another order of 50 buses from Highland Electric Fleets, to be deployed in Alberta. Both were contingent on receiving grants under the federal zero-emission transit fund.

In an email, an STC spokesperson said the conditions of the purchase, “which are subject to non-disclosure provisions, have not yet been met.” A spokesperson for Highland said its purchase order was “renegotiated, and as a result, no buses were delivered to Alberta.”

Last summer, the federal government revealed that Langs Bus Lines in southwestern Ontario had been approved for 200 buses through the federal fund, more than two-and-a-half years after Lion announced the order. Vice-president Kevin Langs said the company has so far received 70 Lion Electric buses.

Vasundhara Saravade, a postdoctoral fellow at the Smart Prosperity Institute, said EV companies in Canada face major challenges, including high capital costs and red tape. She said it’s complicated to apply for federal funding, and many municipal and provincial governments don’t have electric vehicle procurement policies.

“It’s more the initiative being taken by the private owner of the school bus fleet or the district-level school boards,” she said. “It’s very fragmented when it comes to the demand.”

But Mulhall said many people invested in Lion based on bullish announcements like the Amazon deal and the big school bus orders, which never panned out. “I think people have more questions than answers, and frankly, the company has not been forthcoming to anyone,” he said.

He has filed a complaint with Quebec’s financial watchdog — Autorité des marchés financiers. A spokesperson said the watchdog has so far received 336 complaints about the company.

Mulhall’s daughter rides a Lion Electric bus to school every day. He used to be proud of his investment in a flagship Quebec company, but now he feels “totally wronged,” he said.

“I look at this bus every day, and it actually infuriates me.”

This report by The Canadian Press was first published Feb. 13, 2025.

Maura Forrest, The Canadian Press