2023-11-07 18:37:48
Lion Électrique is reorganizing its production schedules. The manufacturer is delaying the launch of its school minibus to focus on its other electric buses and trucks. A commercial dispute also forced him to delay production of the Lion8T truck by a few months.
The decision to postpone the launch of school minibuses, announced Tuesday, is eating into the order book of the Saint-Jérôme company. The book includes 2,232 vehicles as of November 6, a decrease of 327 vehicles compared to the month of August.
The manufacturer wishes to concentrate on the production of its other models while commercial production of the Lion5 (truck, ambulance) and the LionD (bus) began in the third quarter, explained the founder and CEO of Lion, Marc Bédard , during a conference call to discuss third quarter results. “It’s a question of concentration and cost management,” comments the manager.
Lion has therefore decided to remove orders for school minibuses from its book, said the head of finance, Richard Coulombe. “We wanted to talk with our customers to see if they are willing to wait a longer period or convert their order to another model. »
Analyst Benoit Poirier, from Desjardins Capital Markets, perceives the announcement as “slightly negative”. “Order book is one of the main factors determining the stock price. »
Production of the Lion8T truck, planned by the end of the year, is also postponed to mid-2024. A commercial dispute with its supplier Nikola is forcing Lion to produce its own battery.
Lion revealed a year ago that it had started an arbitration process against battery manufacturer Romeo Power, which was acquired in October 2021 by electric truck manufacturer Nikola Motor.
The Quebec company said it had received indications that Romeo might not fully respect its obligations under a contract signed in November 2020. Indications which came to fruition.
Lion Electric dropped the arbitration process while Nikola liquidated Romeo’s assets last summer. The legal proceedings against Nikola are continuing. “Given that the process is judicialized, we cannot make further comments,” replies Mr. Bédard.
The manager, however, wanted to be reassuring about the future of the Lion8T without the battery promised by Romeo. “We had no choice but to produce our own battery and it will obtain the necessary certifications at the beginning of next year,” explains Mr. Bédard. […] We’re going to have a big reach. We anticipate very good demand. »
The company also indicated that its customers are still experiencing delays in obtaining a federal subsidy through the Zero Emission Public Transportation Fund. Nearly half of the vehicles on the company’s order book depend on this program.
The company’s president, Nicolas Brunet, explained that the administrative process of the fund was cumbersome for customers and Lion Électrique. “We hope that once the first big order is approved, things will speed up on their end. »
Less spending
Management also reiterated its intention to reduce its expenses now that its projects for a school bus factory in Joliet, Illinois, in the United States, and a battery factory in Mirabel, in the Laurentides region, are completed.
In the third quarter, capital expenditures reached US$16.2 million, a decrease of US$13.2 million compared to the same period last year. “We are planning capital expenditures of less than US$10 million for next year and this will be spent on maintenance,” replied Mr. Coulombe.
The company reported a net loss of US$19.9 million for the third quarter ended September 30, compared to a loss of US$17.2 million in the same period last year.
Revenues, for their part, reached a record of US$80.2 million, almost double compared to last year.
Lion delivered 245 vehicles, 89 more vehicles than during the same period last year.
Lion’s stock was up 9 cents, or 3.8%, at $2.47 on the Toronto Stock Exchange around midday.
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