Latest news with #LionElectric
Chicago Tribune
17 hours ago
- Automotive
- Chicago Tribune
Why did Lion Electric fail? Democrats, Canada and Lion itself all played a role.
The windshields still haunted Tom Olson as he walked through the Lion Electric school bus factory in Joliet for the final time last month. During nearly three years as the factory's manufacturing engineer, he'd never been able to get the windshield to fit properly onto the fiberglass shell that covers the bus's metal frame. The company's top brass, swimming against a tide of red ink back home in Quebec, never fixed the design. Starting with the very first bus, he said, workers had to anchor the sides of the windshields with extra-thick helpings of a sticky gray sealant that they called goop. 'The sealant will be fine for the first year. But what really scares me is, what's it going to do after three or four Midwest winters?' Olson said. 'I don't think they'll lose a window. But I know it's going to leak.' Olson worked at Lion Electric until Thanksgiving. On the Sunday after the holiday, he received an email saying the factory had closed. His return to the place where, at age 60, he'd been hoping to finish his career came during a liquidation sale. He said his silent goodbyes amid a steady stream of industrial scavengers from around the Midwest. And he kept replaying in his head all the mistakes, all the missed opportunities. Figuring out what went wrong at Lion Electric is crucial not just for former employees, but also for politicians, corporate leaders and environmentalists who want Illinois to build more battery-powered vehicles and protect future generations from increasingly toxic air. Gov. JB Pritzker has touted Illinois as a clean energy leader since the 2021 passage of his Climate and Equitable Jobs Act, which will ban the burning of coal and gas to make electricity by 2045. But with energy shortages looming, the state is reconsidering its moratorium on new nuclear plants and reducing its electric vehicle rebates. The administration of President Donald Trump is now targeting CEJA itself. In 2023, the governor told hundreds of people gathered for a ribbon-cutting ceremony that Lion Electric 'delivers a tremendous boost for Illinois' clean energy economy and our environmental leadership, too.' After the applause died down, Olson remembers wondering why faceless bureaucrats in the U.S. and Canada were taking years to release school bus subsidies intended to fight climate change. He recalled starry-eyed executives who raced to have the capacity to build 50 buses a week at the plant by 2024 but who never, he said, built more than four or five. 'Lion had the right idea. But they tried to do it too fast, too big and with not enough money,' Olson said. 'If we had the kind of money Tesla did, we'd still be making buses in Joliet.'Analyzing Lion Electric's miscues is also important for Quebec, which last month launched still more electric school bus subsidies to support new owners who'll restart one of the company's factories north of Montreal. The move follows a court-supervised reorganization and sale that erased most of Lion Electric's $244 million debt to its creditors. The new owners don't plan to restart the plant in Joliet. Last year, Pritzker blamed the closure on then-President-elect Trump's frequent promises, in the governor's words, 'to kind of tear down the electric vehicle industry development.' In January, citing Trump's opposition, California withdrew its requirement for fleet operators to begin replacing diesel trucks with battery-powered models starting this year. This decision shut down one of the first electric truck markets Lion Electric had hoped to tap once its bus production was up and running. However, Pritzker failed to identify the significant problems that arose when Joe Biden still sat in the White House, when Democrats still ran the U.S. Congress and when Democrats still controlled Springfield — as they do today — from top to bottom. The governor's spokesperson, Alex Gough, didn't respond to emailed inquiries for this story. In 2021, Biden's bipartisan infrastructure law allocated $5 billion for electric school bus subsidies. But under Biden, the Environmental Protection Agency's approval processes were slow and cumbersome. To this day, the agency has released only $3 billion for specific bus purchases, according to World Resources Institute, a nonprofit advocacy group. This $3 billion in EPA subsidies, plus state and utility assistance, including from ComEd, were enough to pay for 13,931 buses from Lion Electric and other manufacturers. However, according to the institute, only 5,193 have been delivered. Journalists Ezra Klein and Derek Thompson make a related argument in their new book 'Abundance.' They say Biden included $7.5 billion in the 2021 infrastructure bill to build half a million electric vehicle charging stations. By March 2024, only seven charging stations were up and running. Klein and Thompson say these bureaucratic quagmires left Democrats with few positive counterexamples to offer when Trump attacked the whole idea of fighting climate change as a hoax. Democrats will have to learn to 'get stuff built'' much faster, the authors say, if they're ever to reclaim power in Washington, D.C. Then there are Lion Electric's own choices and errors. Lion Electric does resemble Tesla in two ways — it staked its future entirely on electric vehicles and built its own battery packs. The company took this path because Lion Electric was the cornerstone of Quebec's bid to become a green manufacturing hub, the Chicago Tribune reported in June 2023. Longtime manufacturers like Blue Bird, Thomas Built and I.C. Bus took the safer route of converting their diesel models to run on batteries and electric motors. Roger D'Hollander is the chief operating officer of Ontario-based Damera Corp., which announced last month it will create at least 90 jobs at a new factory in Peoria for 19-passenger electric transit buses. Pritzker bragged in a news release that Damera's arrival is the latest step in his six-year quest to 'solidify our status as a hub of the EV future.' D'Hollander says Lion Electric wasn't properly managed. 'They went through a public offering and got a fairly sizable amount of capital, and they sort of blew through that capital,' he said. 'We're a privately held company. Everything we do is done very conservatively. We're not going over the top, in terms of putting the facility in, until we see demand pick up.'Marc Bedard, the former Lion Electric chief executive officer, didn't respond to messages seeking comment. Spokesman Loïc Philibert said the new owners had no comment. Before leaving in January, Nate Baguio served as Lion Electric's senior vice president for U.S. commercial development. He said the closure of the company's plant in Joliet wasn't a verdict on all-electric vehicles but rather, 'an indicator that scale alone isn't enough.' Baguio said startup companies can't just look at aggregate numbers, like the total of 500,000 school buses that operate in the United States today, and say, 'We're going to convert all of those.' Rather, these companies need a multifaceted strategy that coordinates manufacturing, infrastructure, training, private investment and public incentives during the startup. Baguio said he's helping develop such coordinated strategies in his new job at DCC Marketing. The firm is an affiliate of TCCI Manufacturing, which makes electric vehicle components in Decatur. In April, TCCI executives, joined by Pritzker, dedicated an innovation center that includes a factory for electric compressors, which are crucial for battery-powered vehicles, plus a college-affiliated training center and a test lab that simulates real-world driving. 'The fossil fuel industry has had 120 years to build up its infrastructure and develop its technology,' Baguio said. 'We're still, reasonably, in the first 10 years of electrification.' When Olson returned to Lion Electric in May, the quarter-mile-long factory with a 45-foot-high ceiling was silent except for whirring ventilation fans off in the distance. Now and then, electronic chimes would go off to remind long-gone workers to begin and end their coffee breaks. After helping arrange every square inch for maximum efficiency, Olson said he was appalled by how chaotic the factory looked. He saw seats, tires, windshields, wiring harnesses, electric motors and long steel body frames stacked up next to each other in no particular order. Here and there was a fender, or a hood, or the gloomy shell of a half-assembled bus body. Lion Electric had shipped as many usable parts as possible to Canada before seeking protection from its creditors. The auctioneers came in and rearranged everything again. Olson saw pallets of parts still wrapped in black plastic. These were for a small bus similar to Damera's that Lion Electric dropped after concluding it could never be profitable. Seventeen 4-ton chain hoists, which lift heavy objects up and down, were still in their original packing cases. These were for electric trucks the company never built at the plant in Joliet. Dozens of undelivered buses were parked at the back end of the plant, some painted on the side with the names of customers like Kickert School Bus Line. John Benish, president of Lynwood-based Kickert, said government money paid for the buses, not his, and that he has no idea when they may get delivered. Olson knelt down under one of the buses to look at the safety cage around a small diesel fuel tank. The fuel powers a boiler that provides heat for the passenger compartment. From the beginning, the holes for the bolts that attach the safety cage to the bus were too small. Instead of fixing the design, Olson's bosses had him spend an hour for each bus drilling out bigger holes in the thick black metal. At one point, the factory ran short of the diesel boilers, since the Russian invasion had disrupted shipments from the Ukrainian factory that made them. Lion Electric also struggled with supply chain disruptions in the aftermath of COVID-19 and, Olson said, parts shortages caused by late payments to suppliers. 'We could never get into a good rhythm, you know, to actually run the assembly line the way it's supposed to be run,' he said. Olson's journey to the shattered factory began on the farm where he grew up near La Crosse, Wisconsin. He decided early on that he liked fixing farm equipment a lot better than milking cows. This led to an engineering degree and eventually to Navistar, where, among other things, he tested pollution control equipment for diesel engines. This turned out to be a punishing job because, at one point, Navistar bet on a pollution control approach that Olson believed hadn't been fully proven, and that wound up with so many defects it tanked the company's sales. But the buyers roaming Lion Electric that day weren't much interested in Olson and his memories. Jordan Rhodes had driven 400 miles from Somerset, Ohio, to look at two 70-foot, ventilated paint booths at the back end of the plant. Rhodes, his father and his uncle run a company that makes metal tanks for the natural gas industry and others. This means he has to paint the tanks, and he said the booths at Lion Electric would be ideal for this purpose. Wally Williams spent the day looking up at overhead cranes. That's because he works for American Rigging and Millwright Service in Rockford. After the auction, his job will be to pull down the cranes, transport them to the buyers' factories and reassemble them. James Reid came hoping to buy a Toyota forklift and maybe a double-wide refrigerator for his cafeteria. He runs the machine shop at Tempco Electric Heater Corp. in Wood closing bids on May 29 showed that Lion Electric creditors did pretty well when auctioning off equipment that can be transferred to any factory. But when it came to customized machinery for making buses, they got big losers included the custom-made, 38-foot automated guided vehicles that hauled buses around the factory instead of traditional chain- or cable-driven assembly lines. Lion Electric paid $150,000 apiece for 25 of them, Olson said. Two arrived a month before the factory closed, joining five others the company had never May 29, the closing bid for these bus-size automated guided vehicles was $1,500, or one penny on the dollar. And with the factory's collapse, Lion Electric customers face significant risk. Rich Decman, superintendent of the Herscher public schools district 65 miles southwest of Chicago, said he's had no contact with the company for months, even though he owns 25 of its buses. That's half his fleet, and he's planning to keep them going for seven more years. Electric school buses take off in Illinois, with over 200 on the road: A 'phenomenal climb'Decman said his students love the buses because they're quiet and air-conditioned. That's a big deal for a district that covers 250 square miles and where the average bus ride lasts an hour. He's also saving $6,000 per bus per year in fuel. He said all the buses are operating regularly except one, and his mechanics can't figure out what's wrong with it. He's purchased several extra electric motors that operate the front door and the stop signs on the sides of the buses, since these break down frequently. Decman paid for the buses and the chargers with an EPA grant of almost $10 million, so he still believes the district can't help but win financially. But he confirms he's had to fix some leaky windshields. When asked about the longevity of the seals around the windshields, he said, 'That's why it's good news that Lion will recover to some degree,' referring to the court-supervised reorganization in Quebec. 'We are hopeful they'll be able to provide some level of service for our issues.' Even with Lion Electric's misery and Trump's effort to eviscerate pollution controls on cars, trucks and power plants, the electric school bus is not dead. At a March conference of state environmental officials, U.S. Sen. Shelley Moore Capito said she expects Trump to release the other $2 billion Biden had allocated to electric school buses. Capito, a West Virginia Republican who chairs the Senate environment committee, said she expects the president to do so before the statutory deadline of October 2026. This is partly because of court orders forcing Trump to release committed Biden-era grants. Kevin Matthews is head of electrification for First Student Inc., the largest North American school bus operator. He still plans to deploy 30,000 electric school buses by 2035, or two-thirds of his fleet. He said the Lion Electric shutdown in Joliet won't slow this deployment because legacy manufacturers like Blue Bird are getting better at meeting his battery-only needs with converted diesel models. Setting aside the unpredictable impact of Trump's tariff policies, Matthews expects the total lifecycle cost of an electric school bus to match that of its diesel counterpart by 2030. At that point, he said, electric school bus sales will increase rapidly and without needing government incentives. Even now, he said, the environmental benefits of electric school buses are the main attraction. 'Our first and foremost commitment is to the safety of the 2.7 million children who ride our school buses every day,' Matthews said. 'With zero-emission buses, we can provide a safe environment for them to be in.'' Even so, Lion Electric's demise in Joliet provides plenty of lessons for how to improve. Baguio, formerly of Lion Electric, warned that Biden's insistence on early deployment of electric school buses in rural and tribal areas nationwide, however well-intentioned and necessary politically, placed an enormous strain on the startup's ability to distribute and service its buses. Josipa Petrunic, who runs a Toronto nonprofit that helps cities and provinces procure transit and school buses across Canada, warned anew of the familiar dangers of government incentives — that they can shelter weak companies and entice corporate executives to place bets they'd otherwise avoid. 'When it comes to electric school buses, nobody ran as far or as fast or clearly as risky as Lion Electric,' said Petrunic, president of the Canadian Urban Transit Research and Innovation Consortium. Petrunic still credits Lion Electric with advancing the technology and helping show that students and school administrators will flock to electric buses if given the chance. The same will soon be true, she said, of electric trucks. 'It may take 10 years for this technology to get efficient and make profit sense even in low-margin operations,' Petrunic said. 'After that, there won't be a U-turn. Nobody will be going back to diesel.' This shift won't come soon enough for Joliet, where the Lion Electric factory stands silent but where the warehouses and petrochemical plants all around it are booming. It won't come soon enough for Olson and his wife, Sue. They moved into a new house just a month before the Lion Electric plant closed, and Tom's unemployment benefits are running out. He's not old enough for Medicare, so they feel they have no choice but to pay $1,300 a month for health insurance. As he looks for work, Olson's résumé shows a lifetime spent on the front lines of cleaning up diesel engines and building electric vehicles. So far, there have been no offers. 'Everybody's really interested in that 30 years of knowledge, but they don't want it in a 60-year-old body,' Olson said. 'They want it in a 25-year-old body so they don't have to pay him squat.'
CBC
22-05-2025
- Business
- CBC
Quebec judge approves sale of Lion Electric
A Quebec Superior Court judge has approved the sale of vehicle-maker Lion Electric to a group of Quebec investors. Justice Michel Pinsonnault says the deal is the only option that ensures the struggling manufacturer can keep operating. The consortium of investors is led by Pierre Wilkie, a director of the electric-vehicle company, and Montreal real estate entrepreneur Vincent Chiara. Lion Electric will preserve its manufacturing plant in Saint-Jérôme, Que., where it made electric school buses and trucks, but hundreds of employees will be permanently laid off. The investors made a revised offer after the Quebec government announced last month it would not invest any more public money in the company.
Bloomberg
22-05-2025
- Business
- Bloomberg
Bankrupt Electric Bus Maker Lion Rescued by Quebec Investors
A Quebec judge will approve a transaction aimed at saving Lion Electric Co. from bankruptcy, but shareholders and most creditors will not receive any proceeds. An investor group that includes Montreal real estate tycoon Vincent Chiara will take over the Saint-Jerome, Quebec-based company using a complex legal process called a reverse vesting order. The order keeps keep Lion's certifications intact while eliminating liabilities and unwanted assets.
CTV News
22-05-2025
- Business
- CTV News
Quebec judge approves sale of vehicle-maker Lion Electric to investor group
The Lion Electric Company's lithium-ion battery manufacturing facility in Mirabel, Que., is shown on Sept. 14, 2023. THE CANADIAN PRESS/Christinne Muschi A Quebec Superior Court judge has approved the sale of vehicle-maker Lion Electric to a group of Quebec investors. Justice Michel Pinsonnault says the deal is the only option that ensures the struggling manufacturer can keep operating. The consortium of investors is led by Pierre Wilkie, a director of the electric-vehicle company, and Montreal real estate entrepreneur Vincent Chiara. Lion Electric will preserve its manufacturing plant in St-Jérôme, Que., where it made electric school buses and trucks, but hundreds of employees will be permanently laid off. The investors made a revised offer after the Quebec government announced last month it would not invest any more public money in the company. Lion Electric entered creditor protection in December and has been seeking a buyer since then. This report by The Canadian Press was first published May 22, 2025. The Canadian Press
Canada Standard
20-05-2025
- Business
- Canada Standard
Lion Electric Finds New Investors, Li-Cycle Heads Toward Bankruptcy Protection
One iconic Canadian clean energy upstart got a new cash infusion last week while another one slid closer to bankruptcy, as St. Jerome, Quebec-based Lion Electric announced it had lined up new investors while Toronto-based Li-Cycle Holdings began dissolution proceedings in Canada and the United States. Li-Cycle's battery recycling operations in Germany and Switzerland will continue, Sustainable Biz reports, but the company will shut down its business in Asia as well as North America. On Thursday evening, Lion Electric said it had reached a "definitive agreement" with a group of Quebec investors for its electric bus manufacturing operation, the Globe and Mail writes. The new consortium includes serial entrepreneur and former Lion board member Pierre Wilkie and Montreal real estate magnate Vincent Chiara. The Superior Court of Quebec is scheduled to review the deal May 21. View our latest digests Earlier this month, Lion looked like it was on its way to liquidation when the Quebec government refused any further public funds after investing tens of millions of dollars in the company. Jean-Francois Nadon, a restructuring specialist with Deloitte, said Lion laid off all but 12 of its employees after the government announced its decision, was still able to pay its remaining staff, but could not come up with May 1 rent for all of its locations, totalling about $400,000. Now, the Wilkie consortium has "agreed to provide new capital, bolstered by the renewal of a provincial government subsidy program that offers incentives to buyers of electric buses," the Globe says. The new owners will take the company private, with a more modest business plan likely focusing on electric school bus manufacturing in St. Jerome. "Retail shareholders will probably be wiped out," the Globe writes, "while other investors could also lose the bulk of their holdings." In Toronto, meanwhile, Li-Cycle announced it would begin selling off its assets after filing for bankruptcy protection in Canada, Reuters reports. Its U.S. operations are also shutting down in New York State. In late April, the company announced it had suspended operations at several of its production facilities after an acquisition deal with mining behemoth Glencore PLC, its biggest secured creditor, fell through. "The company's Arizona and Alabama factories are halting operations to save cash, leaving about 85 employees furloughed, along with 32 at the firm's Toronto headquarters," The Logic reported at the time, and CEO Ajay Kochhar was expected step down as of May 15. Reuters says Li-Cycle "kept running into cost overruns and technical issues" after securing a financial lifeline for its Rochester, New York facility last November, in the form of a US$475-million loan from the U.S. Department of Energy. Now, Li-Cycle has accepted a $10.5-million debtor-in-possession deal with Glencore that will allow it to keep operating while it restructures, along with a $40-million stalking horse credit bid from the UK-based mining behemoth. Sustainable Biz traced the history of Glencore's partnership with Li-Cycle back to a $200-million investment in May 2022. But after that, construction at the Rochester plant that Kochhar had described as a "cornerstone asset" ran into cost overruns. After Glencore poured another $101 million into the company in March 2024, Li-Cycle cut 17% of its global work force and shifted its management model in search of efficiencies. "The problems faced by Li-Cycle are not unique to the company," Sustainable Biz wrote at the time. "The sector in Canada has hit major snags, including both Umicore and E-One Moli pausing plans for their battery factories and Ford withdrawing from its partnership with SK and EcoPro on a $1.2-billion battery plant in Becancour, Que." The news story said key factors have included "the challenges of building up a new industry, and an electric vehicle market that has not been growing at the rapid pace some companies expected," along with "the U.S. government that has acted on its opposition to clean energy projects and the shift to protectionism in global trade." Source: The Energy Mix
