Another taxpayer-subsidized EV manufacturer goes belly up

The Quebec government may reconsider its electrification strategy after electric vehicle manufacturer Lion Electric, the recipient of nearly $200 million in taxpayer subsidies, nears liquidation.

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The Quebec government may reconsider its aggressive electrification strategy after electric vehicle manufacturer Lion Electric, the recipient of nearly $200 million in taxpayer subsidies, appears headed towards liquidation.

The company, which had been producing electric school buses and trucks for the province, is on the verge of collapse after the Quebec government refused to offer further financial support

"It would have been irresponsible to go ahead with another significant injection of public funds into Lion, based on the plan that was presented to us," Economy Minister Christine Fréchette told reporters in Quebec City last week. "I would have expected the private sector to be more involved."

Lion Electric had requested an additional $24 million in government aid last week to relaunch the company but was ultimately denied.

“Lion Electric’s likely liquidation is another example of why governments shouldn’t be in charge of deciding where the taxpayers’ money goes,” Emmanuelle B. Faubert, an economist at the Montreal Economic Institute told True North. “We should cut taxes, leave that money in the hands of the population and simply let the market do what it does best.”

Premier François Legault suggested the government's agenda could soon be shifting and laid the blame on U.S. President Donald Trump.

"We see that the situation has changed in the United States with the arrival of Trump," he said. "I continue to think that in the medium and long term, we need to electrify both our transportation and our entire economy. But we have to realize that currently, in the short term, we have a neighbour who isn't making this a priority."

However, Quebec director of the Canadian Taxpayers Federation Nicolas Gagnon thinks it's Legault himself, who is to blame.

“This was part of Legault’s bet on the EV industry in Quebec and his attempt to build an industry out of taxpayer’s money,” Gagnon told True North. “Not only have we lost about $200 million in Lion Electric but there is a strong chance that we may lose more in other similar ventures.”

Lion Electric's court-appointed monitor said the company is very likely to be liquidated during a court hearing on Monday, citing that government aid would have been a necessary condition for any potential buyers who might have been interested.

There are currently around 1,175 Lion school buses still in operation out of the roughly 8,000 in circulation across the province, part of a Quebec subsidy program to eventually have 65% of all buses be electric.

While Gagnon did want to make a point to “thank” the government for “not putting more taxpayer’s money into that venture,” he also said that Legault should have “never put a single penny into Lion Electric.”

Fréchette also said she “expected the private sector to be more involved” but now the province stands to lose about $140 million on the company.

This was an area where she and Gagnon agreed, “it should have been pushed by the private sector from the first place,” Gagnon said.

“The government made a bill to basically force a lot of companies in Quebec to buy buses from Lion Electric. Now all of those people who were forced to buy from Lion Electric won’t be able to get any post-client maintenance or additional service. There have already been a lot of cases of those buses having a hard time on the road,” he continued.

Multiple Lion Electric school buses have caught fire in the past year.

“This is what happens when the government throws taxpayers’ money in one direction and tries to modalize the market based on their own will,” said Gagnon. “We have seen the same thing with Northvolt, Taiga and the list goes on.”