Lion Electric announces 300 more layoffs, driving stock into the tank

The Lion Electric Co.'s lithium-ion battery manufacturing facility is shown in Mirabel, Que., Thursday, Sept. 14, 2023. The company says it's cutting about 120 jobs as part of a plan to reduce costs. (Christinne Muschi, The Canadian Press)

Lion Electric Co. says it is laying off hundreds more workers as part of a plan to staunch its financial losses.

The announcement sent the electric bus company's shares into a tailspin, leaving them a penny stock by day's end. The share price fell by 22 cents or more than 18 per cent to 98 cents when markets closed Wednesday -- far below highs that topped $24 in mid-2021.

Lion Electric said some 300 employees would be let go in the coming days in a 30 per cent cut to its workforce.It expected most of the layoffs to be temporary.

The company previously laid off about 220 employees in a pair of announcements in February and April.

The Montreal-based outfit said the layoffs were part of a plan to better align its costs with current demand. The plan also involves ramping down production of electric trucks, creating a new product line to sell its battery packs to third parties and potentially leasing out a big chunk of its plant in Joliet, Ill.

The announcement came as the company reported net losses that ballooned 63 per cent to US$19.3 million in the second quarter and a 48 per cent drop in revenue to US$30.3 million compared with the year before.

In the three months ended June 30, Lion Electric said it delivered 101 vehicles -- a drop of nearly 50 per cent year-over-year -- and a diluted loss of nine cents per share versus a loss of five cents per share a year earlier, beating analysts expectations.

This report by The Canadian Press was first published July 31, 2024.