Lion Electric Co., the Canadian manufacturer of electric buses that received safety complaints from several Maine school districts, is facing steep financial losses as a result of falling vehicle sales.
The electric vehicle manufacturer reported a sharp decline — down almost 62 percent, or $50 million from the same period last year — in its third-quarter revenue, and declared a gross loss of $16 million, as compared to a gross profit of $5.4 million from the third-quarter of 2023.
The company’s financial struggles come after several Maine districts, including Winthrop, Vinalhaven and Yarmouth reported mechanical and service problems with its buses, and took the buses off the roads.
Lion Electric has warned investors it may not have enough cash flow from operations to meet its obligations for next year, according to reporting from the Portland Press Herald.
“In Q3, we further adjusted our cost structure and optimized our operations to continue to execute on our business strategy to support and promote the increasing electric school bus demand and maintain our leadership position,” Marc Bedard, the chief executive officer and founder of Lion Electric, said in a news release. “… Despite the persistent challenges that we and our industry continue to face and which put significant pressure on our liquidity.”
On Nov. 18, the company announced a two-week extension of an agreement with creditors, but shortly after temporarily laid off about 400 workers in Canada and the U.S.
Currently, Lion Electric has suspended manufacturing at its site in Joliet, Illinois.
Falling sales are a result of the timing of funding from the U.S. Environmental Protection Agency and repeated delays in disbursing subsidies to customers under a Canadian zero emission transit funding program, the Press Herald reported.
In addition, the company is short on cash, is facing disruptions in its supply chain, the newspaper reported, and is in a dispute with a battery supplier.
