Lion Electric cuts 300 jobs as it reports second quarter loss of US$19 million

For the third time this year, electric vehicle manufacturer Lion Electric has announced jobs cuts to offset losses, this time eliminating about 30 per cent of its workforce.

As it announced losses of more than US$19 million for the quarter ending June 30, the St-Jérôme-based company said its new “action plan” involved cutting 300 jobs in Canada and the United States.

Article content

“All sectors of the organization” will be hit by the layoffs, the company said in a communiqué. The plan will go into effect “over the coming days” and will result “primarily in temporary layoffs.”

The company estimates the job cuts could save it up to $25 million annually “presuming that the temporarily laid-off employees are not re-hired.”

In April, Lion announced it was cutting 120 jobs, most of them in Canada and in its corporate and product development sectors. The company also cut 100 jobs in February, the layoffs mostly from the night shift at its plant in St-Jérôme.

Second-quarter results showed a net loss of US$19.3 million compared to US$11.8 million during the same quarter last year. During the first quarter this year, the company recorded a net loss of $21.7 million.

Faced with a difficult financial situation, the company announced at the beginning of this month that it had reached a new agreement with Investissement Québec for a loan of up to $7.5 million, as well as new arrangements with private lenders.

In a press release, Lion director Marc Bédard acknowledged that the electric vehicle market is facing “serious challenges.”

“It is with this in mind that we have developed an action plan aimed at adjusting our costs structure to allow us to continue to meet the growing demand for electric school buses and maintain our leadership position, while continuing to support truck operators in their transition toward electrification and focusing on our profitability objectives,” he said.

Lion delivered 101 vehicles in its second quarter, 98 fewer than for the same period last year. Revenues for the second quarter also dropped, going from US$58 million to US$30.3 million.

As of Tuesday, Lion’s order book included 1,994 electrical vehicles — 190 trucks and 1,804 buses — for a total value of US$475 million, according to company estimates.

Article content

Article content