Electric Lion hopes Biden’s plan will give new impetus to orders

The Saint-Jérôme company’s order book, valued at $ 600 million, reached 2,422 electric vehicles as of May 3, 2022, or 286 trucks and 2,136 buses.

Opposite this figure is the potential production of 22,000 vehicles that the manufacturer wants to reach by 2023, said Nauman Satti, of Laurentian Bank Securities. The company still expects to start making the vehicle at its new U.S. plant in Joliet, Illinois in the second half of the year. The low order threshold casts doubt on the investment thesis, the financial analyst commented. The risk in enforcement continues to rise over time.

Lion’s president and CEO, Marc Bédard, wanted to be reassured during a call to financial analysts on Wednesday. In the United States, the Biden administration confirmed in February that it would pay states nearly US $ 5 billion over five years to support the purchase of electric school buses.

It was hard to get orders last year in the United States, because everyone was waiting for the program, he explains. I believe we will see orders from US carriers increase in the future.

The order book in the electric truck segment also showed signs of weakness. There are 14 fewer trucks there than three months ago. With regard to deliveries, Satti believes that means the company only received two truck orders in the quarter.

Truck companies have been full of their hands over the past year, Mr. Bédard pointed out. Their attention is elsewhere – than electrifying their fleet – with pandemics and supply chain disruptions. We have a good indication that this market will return.

The electric bus occupies a larger portion of the company’s activities, but the potential market for the electric truck is larger, underlined Mr. Bédard. Note that the truck market is ten times larger than the school bus market and the American market is ten times larger than the Canadian.

The lack of vitality in the electric truck market can be explained by the fact that it is less subsidized than the school bus, advances Rupert Merer, of Financière Banque Nationale. Demand may grow faster in markets like California, which has introduced incentives to encourage the use of electric trucks. We think Lion can have success in this market by starting production at its plant in Illinois while it can take advantage of vehicles made in the United States.

Battery reserves

Marc Bédard also indicated that his difficulties related to the supply chain continue to diminish. The company’s strategy over the next few months is to maintain larger reserves of parts and components to avoid production delays.

The price inflation of electric battery components does not seem to be worrying management at the moment. Chief Financial Officer Nicolas Brunet mentioned that the company has nearly 3,000 batteries in stock in addition important upcoming orders. The company has also entered into long -term contracts with these suppliers, giving it some protection against price increases.

He remembered wanting to produce the company eventually its own battery. Even if the price of materials rises, the advantage of doing it yourself, without having to pay a supplier’s profit, will allow us to have a significant reduction in the cost of our batteries.

Revenues were fourfold

Lion Electric announced the other day that its sales were nearly four times compared to last year to $ 22.6 million thanks to an increase in the number of vehicles delivered.

The maker of all-electric trucks and buses has notably announced that it delivered 84 vehicles in the first three months of the year, an increase of 60 vehicles compared to 24 delivered in the same period last year.

The company posted net income of $ 2.1 million, compared to net losses of $ 16.1 million in the first quarter of 2021. However, this profit takes into account the gain of $ 21.5 million associated with an accounting item and the lower charges than last year associated with a stock -based compensation program. The diluted adjusted loss per share, in part, is 6 cents.