Family-owned SMEs that invested in Lion Electric buses are concerned about the company’s financial instability, fearing potential bankruptcy and difficulties in obtaining parts for repairs. Problems with vehicle reliability, particularly in electronics and heating systems, have also emerged. Quebec’s financial support remains uncertain, with recent subsidy cuts affecting transport operators. Meanwhile, Groupe Girardin, another electric bus manufacturer, has dismissed any interest in acquiring Lion, citing excessive risks and ongoing expansion plans for their operations.
Concerns Loom Over Family-Owned SMEs Investing in Lion Electric Buses
Family-owned small and medium enterprises (SMEs) that have invested heavily in Lion Electric buses, under the guidance of the Legault government’s push for electrification, are now facing uncertainty. They fear that the debt-laden company may go bankrupt, leaving them with vehicles that could be challenging to repair.
Stéphane Boisvert, president of Autobus Groupe Séguin, expressed his worries in an interview, stating, “If Lion shuts down for various reasons, there will be significant challenges regarding parts and warranties.” Boisvert manages a fleet of 356 school buses, with 75 coming from Lion Electric. He shared his concerns about the future with his fleet manager, pondering, “What happens if we can no longer access parts? We might have to source them from the supplier directly.” Despite appreciating Lion’s products, he feels a “black cloud” hanging over their operations.
Challenges with Lion Electric’s Vehicle Reliability
Several smaller transport operators have voiced similar concerns but chose to remain anonymous due to the precarious financial state of Lion Electric. One executive revealed, “I’ve been experiencing issues with new Lion vehicles, particularly related to electronics and heating systems,” illustrating the uncertainty surrounding the reliability of these electric buses.
In early November, reports emerged indicating that Quebec is willing to support Lion Electric, contingent on private sector involvement. Major shareholders include Power Sustainable and Marc Bédard, who own significant stakes in the company.
Boisvert emphasized the severity of the situation, noting that delays in obtaining parts for Lion buses are becoming increasingly problematic. “If Lion ceases operations, it poses a serious risk for the 1,300 Lion vehicles currently on our roads,” he elaborated, serving as an administrator for the Federation of Bus Transporters. Luc Lafrance, CEO of the Federation, echoed these concerns, questioning if the government has a backup plan to facilitate the continued electrification of the transport sector.
Financial support is another pressing issue for transport operators mandated to purchase costly electric buses following the 2021 decree. Quebec currently offers $150,000 in subsidies for Lion electric school buses, priced over $300,000, but an additional subsidy of $12,900 from the Ministry of Education has recently been eliminated. Lafrance stated, “The program has been cut. We have met with the Prime Minister’s office to advocate for its reinstatement.”
Alternatives and Industry Reactions
In the event that Lion Electric were to be sold, Groupe Girardin, a manufacturer of electric school buses, has indicated it has no interest in acquiring the struggling competitor due to what it perceives as excessive accumulated risks. Steve Girardin, vice president of Groupe Girardin, noted, “We have no interest in Lion. Acquiring them would mean duplicating many operations while facing too many risks.” Last Tuesday, Groupe Girardin announced the acquisition of a bus manufacturing plant in Plattsburgh, New York, further expanding its operations.
Girardin’s factory in Drummondville, which employs 600 workers, is currently expanding to include a new generation of electric minibuses boasting a range of over 300 kilometers. The company has previously criticized Quebec for allegedly creating a monopoly through its substantial subsidies for school bus purchases made and assembled entirely in Quebec, with accusations of “obvious favoritism” towards Lion Electric.