Lion Electric announces layoffs, shares recent financial results

Medium- and heavy-duty EV manufacturer Lion Electric Co. recently announced layoffs of approximately 100 employees, mostly impacting the night shift production workforce at its manufacturing facility in Saint-Jérôme, Quebec, Canada. The company says this measure “aims to rationalize its cost structure in the context of prolonged challenges, including delays and challenges associated with the processing and granting of governmental subsidies and incentives, notably the Zero Emission Transit Fund (ZETF) program.” The company called the layoffs temporary and said it will reassess the situation in the future.

Lion Electric Co. also announced its financial and operating results for Q4 and the 2023 fiscal year, which are shared below.

Q4 2023 financial highlights

Revenue of $60.4 million, up $13.7 million, as compared to $46.8 million in Q4 2022;
Delivery of 188 vehicles, an increase of 14 vehicles, as compared to the 174 delivered in Q4 2022;
Gross loss of $9.1 million as compared to a gross loss of $4.8 million in Q4 2022;
Adjusted gross profit of $0.8 million as compared to adjusted gross loss of $4.8 million in Q4 2022;
Net loss of $56.5 million in Q4 2023, as compared to net loss of $4.6 million in Q4 2022;
Adjusted EBITDA of negative $6.3 million, as compared to negative $13.9 million in Q4 2022;
Additions to property, plant and equipment related to the Joliet Facility and the Lion Campus, amounted to $13.7 million, down $25.4 million, as compared to $39.1 million in Q4 2022. See section 8.0 of the Company’s MD&A for the three and twelve months ended December 31, 2023 entitled “Operational Highlights” for more information related to the Joliet Facility and the Lion Campus;
Additions to intangible assets, which mainly consist of vehicle and battery development activities, amounted to $17.8 million, down $3.5 million as compared to $21.3 million in Q4 2022; and
Impairment of intangible assets and property, plant and equipment of $36.0 million and write-down of inventory of $9.8 million related to the LionA and LionM minibuses for which the Company made the decision to indefinitely delay the start of commercial production, as announced on November 7, 2023.

Fiscal year 2023 financial highlights

Delivery of 852 vehicles, an increase of 333 vehicles, as compared to the 519 delivered in fiscal 2022;
Revenue of $253.5 million, up $113.6 million, as compared to $139.9 million in fiscal 2022;
Gross loss of $5.5 million, as compared to gross loss of $12.9 million in fiscal 2022;
Adjusted gross profit of $4.3 million as compared to adjusted gross loss of $12.9 million in fiscal 2022;
Net loss of $103.8 million, as compared to net earnings of $17.8 million in fiscal 2022;
Adjusted EBITDA of negative $34.3 million, as compared to negative $54.8 million in fiscal 2022;
Additions to property, plant and equipment related to the Joliet Facility and the Lion Campus, amounted to $72.2 million, down $75.8 million, as compared to $148.0 million in fiscal 2022.
Additions to intangible assets, which mainly consist of vehicle and battery development activities, amounted to $67.2 million, down $11.9 million, as compared to $79.1 million in fiscal 2022; and
Impairment of intangible assets and property, plant and equipment of $36.0 million and write-down of inventory of $9.8 million related to the LionA and LionM minibuses for which the company made the decision to indefinitely delay of the start of commercial production, as announced on Nov. 7, 2023.

Business updates

More than 1,850 vehicles on the road, with more than 22 million miles driven;
Vehicle order book of 2,076 all-electric medium- and heavy-duty urban vehicles as of Feb. 28; consisting of 285 trucks and 1,791 buses, representing a combined total order value of approximately $500 million based on management’s estimates;
LionEnergy order book of 132 charging stations and related services as of Feb. 28, representing a combined total order value of approximately $4 million;
12 experience centers in operation in the United States and Canada;
Initiated commercial production of LionD units which led to the completion of first deliveries to customers in January 2024; and
Successfully completed the final certification for medium duty Lion battery packs, paving the way for initial deliveries of Lion5 trucks.

“2023 has been a year of significant progress, marked by record vehicle deliveries and revenue, which translated into positive adjusted gross margins, and also by several achievements, including the construction and operation of our two new factories and the start of commercial production of our Lion5 electric truck and our LionD electric school bus,” said Marc Bedard, chief executive officer and founder of Lion. “However, this past year has not been without its challenges, particularly as it relates to a volatile incentive environment that slowed down the pace of orders and deliveries.”

“In 2024, with the growth capex investments now behind us, we will focus on driving growth in orders and deliveries, while diligently controlling costs and keeping a tight control of our liquidity, as we expect the volatile environment to persist for at least the next few months,” Bedard continued. “Despite facing such uncertain environment, we remain committed to leveraging all investments made over the last 15 years, with the ultimate objective to reach profitability.” concluded Marc Bedard.