- The Lion Electric Company (TSX:LEV), a well-established EV manufacturer with 13 years of experience and more than 1,850 vehicles on the road, is trimming its workforce to reduce expenses and right-size operations towards profitability
- The company is letting go of 120 mostly Canada-based employees working in overhead and product development
- The Lion Electric Company manufactures zero-emission vehicles, including class 5 to class 8 commercial urban trucks and all-electric school buses
- Lion Electric stock has given back 52.16 per cent year-over-year, and has lost 93.33 per cent since 2021
The Lion Electric Company (TSX:LEV), a well-established EV manufacturer with 13 years of experience and more than 1,850 vehicles on the road, is trimming its workforce to reduce expenses and right-size operations towards profitability.
The company will let 120 employees go, most of them based in Canada and working in overhead and product development. It believes the restructuring will have no negative impact on production capacity, leaving it with a headcount of 1,150, of which more than 600 occupy manufacturing positions.
The news follows a temporary 100-employee layoff at Lion Electric’s manufacturing facility in Saint Jerome, Quebec, announced in February, and a 150-employee reduction in November 2023 across production overhead, manufacturing, product development and administrative functions in Canada and the United States.
Lion Electric is also pursuing additional cost-reduction measures in third-party inventory logistics, lease expenses, consulting, product development and professional fees, which, when combined with workforce reductions, are expected to result in annualized cost savings of about US$40 million.
Lion Electric’s recent financial performance
Lion Electric has been loss-making in four out of the past five years, though it has managed to increase revenue 8.2 times over the period, reaching US$253.50 million in 2023.
Net income came in at -US$3.07 million in 2019, followed by -US$97.35 million in 2020, -US$43.33 million in 2021, US$17.78 million in 2022 and -US$103.77 million in 2023.
The EV stock’s focus in 2024 will be on growing orders and deliveries, while controlling costs and liquidity, backed by US$93 million in liquidity as of December 2023, as it navigates ongoing delays in processing and receiving government subsidies and incentives, including Canada’s Zero-Emission Transit Fund.
Its order book as of February 2024 includes 2,076 EVs and 132 charging stations, which are valued in excess of US$500 million, well beyond the company’s current market capitalization of C$325 million.
The global EV market, for its part, is expected to reach US$623.3 billion in 2024 and grow to US$906.7 billion by 2028, according to figures from Statista.
Management insights
“Current market dynamics, notably delays experienced with Canada’s Zero-Emission Transit Fund, continue to adversely impact our school bus deliveries and forced us to further reduce our workforce,” Marc Bedard, Lion Electric’s founder and chief executive officer, said in a statement. “We sincerely regret the impact of this decision on our valued employees. It is however crucial to right-size our workforce to the current environment. We remain confident in our long-term growth and that of our industry and, keeping our focus on our profitability objectives and our production requirements, we will continue to work tirelessly on the execution of our business plan.”
About The Lion Electric Company
The Lion Electric Company manufactures zero-emission vehicles, including class 5 to class 8 commercial urban trucks and all-electric school buses.
Lion Electric stock (TSX:LEV) last traded at C$1.44 per share. The stock has given back 52.16 per cent year-over-year, and has lost 93.33 per cent since 2021.
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