Quebec-based electric school bus company wins orders under Biden plan

Lion Electric wins U.S. contracts as a result of Biden administration's plans to electrify school buses.

Quebec-based Lion Electric, an electric school bus manufacturer, is among the beneficiaries of a Biden administration grant to support the electrification of school buses in the United States.

The U.S. government announced on Wednesday that it would provide nearly US$1 billion to 389 school boards in 50 states. The fleet would be 95 per cent electric.

The support of President Joe Biden’s administration demonstrates the potential of the electric bus market, said the president and founder of Lion Electric, Marc Bedard.

“Lion saw an opportunity for all-electric school buses in the market more than a decade ago,” he said in a release.

“Today, we can see the results of our visionary approach in the widespread adoption of such vehicles,” he said.

Lion Electric has more than 200 bus orders, but National Bank Financial analyst Rupert Merer notes that not all of the contracts disclose the identity of the manufacturers.

Factoring in the school boards that have identified Lion as their supplier, the analyst estimates that the company has received the equivalent of US$82 million in orders.

“We believe this announcement will bring new business, which will boost the backlog to 2,357 vehicles as of August," said the analyst.

School boards that have secured funding have until April to place an order. Lion Electric has until October 2024 to deliver.

Merer noted that an additional US$1 billion in funding is planned for 2023.

“With Lion's track record to date, we believe it could be even more successful in this market. There is competition, but we believe it is competitive with its chassis designed for multiple electric models,” he said.

The company is expected to begin vehicle production at its new U.S. plant in Joliet, Illinois, by the end of the year. The company expects to get their rate of production up to 20,000 vehicles in Joliet when the facility reaches full capacity.

The company’s stock was up 13 cents, or 3.51 per cent, at $3.83 on the Toronto Stock Exchange in morning trading.

This report by The Canadian Press was first published Oct. 26, 2022