Image Credit: Bloomberg

Quebec-based electric bus manufacturer Lion Electric Co. is temporarily laying off approximately 400 employees and suspending operations at its Illinois factory in a bid to conserve cash. This decision follows a Saturday deadline to meet financial obligations with key creditors. Lion announced that it had secured short-term financial relief, extending its credit agreements with a group of lenders, as well as loans from the Caisse de Dépôt et Placement du Québec and Finalta Capital Inc., until December 16.

The company stated the additional funds would allow it to explore various options, including restructuring its debt, selling the business or specific assets, securing strategic investments, or other alternatives. Since going public in 2021, Lion has faced significant challenges, including supply chain issues and a dispute with a battery supplier, which have contributed to a steep decline in its stock value—down nearly 90% this year, closing at around 18 cents in New York on Friday.

After the layoffs, Lion’s workforce will be reduced to around 300 employees, focusing on core areas such as bus production, sales and delivery, and customer support.

This development comes as Quebec’s electric vehicle sector faces broader challenges. In October, UK entrepreneur Stewart Wilkinson acquired Montreal-based electric watercraft and snowmobile manufacturer Taiga Motors Corp. Meanwhile, uncertainty looms over a C$7 billion ($5 billion) EV battery factory near Montreal, built by Swedish company Northvolt AB, which filed for bankruptcy protection on November 21.

Paraphrasing text from "Bloomberg" all rights reserved by the original author.