National Post (National Edition)
Lion Electric blames Ottawa for revenue miss
Shares of Lion Electric Co. fell as much as 10.5 per cent after the electric vehicle manufacturer missed estimates for revenue and its cash balance dropped.
The Quebec-based company, which makes electric buses and trucks, said revenue was US$55.5 million, well below the US$69.4 million expected by analysts tracked by Bloomberg. It has been hurt by bottlenecks in a government program that helps public transit and school bus operators purchase new vehicles.
More than half of the vehicles in Lion Electric's US$475-million order book are tied to funding from the federal government's Zero Emission Transit Fund, or ZETF. Delays and challenges with approvals in that program “continue to negatively impact the company's scheduled deliveries and sales efforts,” Lion Electric said in a filing.
Its order book shrunk to 2,004 units, down about three per cent from the end of February.
Some orders may be cancelled or renegotiated if they're not completed before the deadline for sending claims to the ZETF at the end of 2025, which is leading to uncertainty, National Bank Financial analyst Rupert Merer said in a note to investors. But the company may be able to boost orders through U.S. Environmental Protection Agency grants and Quebec government subsidies for school buses, he added.
Merer downgraded his rating on the stock to underperform and lowered his price target to US$1 on “elevated risk related to liquidity limitations and continued delays facing the ZETF program.” The shares were around 99 US cents in mid-afternoon trading in New York on Thursday, down roughly six per cent from Tuesday's closing price.
Lion Electric's cash balance dwindled to US$4.8 million from around US$30 million at the end of December. The manufacturer, which is 34 per cent owned by Montreal-based holding company Power Corp. of Canada, has been trying to address liquidity concerns. In April, it laid off 120 employees, following layoffs in February and August. It estimates that all of its recent cost-cutting measures will lead to US$40 million in savings annually.