EV Maker Lion Electric Gets Cash, Shuts Down U.S. Factory

Electric bus manufacturer Lion Electric Co. is temporarily laying off about 400 workers and halting operations at its Illinois factory to conserve cash after receiving a short-term lifeline from its lenders, Randy Thanthong-Knight reported this for Bloomberg News.

Lion, which went public in 2021, is facing a cash crunch exacerbated by supply chain disruptions and a dispute with a battery supplier. I Photo: Pierre5018 Wikimedia Commons

The Saint-Jérôme, Quebec-based company announced the decision after missing a Saturday deadline to meet obligations to key creditors.

The extensions, which last until Dec. 16, apply to a credit agreement with a syndicate of lenders and a loan provided by the Caisse de Dépôt et Placement du Québec and Finalta Capital Inc., Lion stated on Sunday.

Lion reported receiving additional liquidity that will “provide the company with additional time to actively evaluate potential alternatives,” including restructuring its obligations, selling the business or certain assets, securing strategic investments, or pursuing other options.

Lion, which went public in 2021, is facing a cash crunch exacerbated by supply chain disruptions and a dispute with a battery supplier.

Shares have fallen by nearly 90% this year, closing at about 18 cents in New York on Friday.

The workforce reductions in the U.S. and Canada will leave Lion with about 300 employees, who will focus on bus manufacturing, sales, delivery, and customer support. Quebec’s electric vehicle (EV) industry is currently enduring a challenging period.