In what context was Lion Electric founded and what is its purpose?
Engineering has always been second nature to me and in 2008 I felt the calling to start a company that would change the world. As I was familiar with the market of school buses, it felt like this was the natural direction towards which I should concentrate my passion. For the first six months I gathered data on the appetency for electrification of around 500 operators in North America and the results were overwhelmingly positive. Fifteen years ago, there were zero electric school buses in service, so we got to be the ones that moved the needle in this sector. This kind of change can be pushed forward only through the efforts of OEMs, so Lion Electric was the perfect player to fulfill this role.
Back in 2016, when we started selling the first LionC purpose built electric school bus, we were seen as an eccentric company in an industry otherwise known as extremely conservative. However, as we have demonstrated that this new carved path is packed with opportunities, more and more companies are now starting to retrofit their fleet to join the electric bandwagon. With the generous incentives that are now being offered in this particular sector, we are sure that this trend is only going to get stronger over time. In Canada, we have the Zero Emission Transit fund which is similar to the $5 billion EPA program for school buses over the next five years in the U.S. Additionally, we have seen a lot of pressure from the civil side, with parents now demanding to send their children to school in non-polluting electric buses.
With so much interest being directed towards your solutions, how are you preparing for an upscale?
In Montreal, we have a production capacity of 1,000 school buses and 1,500 electric trucks per year. In anticipation of this rapid development of the electric vehicles market, we decided to upgrade our manufacturing capacity and we built a factory in Illinois. The first "Made in America" school buses were put into production in December 2022 and by the end of this year we are expecting to reach a capacity of 2,500 units.
At full scale, our plant will have a capacity of 5,000 buses in the U.S. There are 45,000 school buses being sold every year, so we believe that our future manufacturing capacity has the potential to keep up with the market demand.
In view of the massive potential of the truck industry sector, how are you planning on engaging with the market?
The trucking market is ten times bigger than the school buses market. We started developing our first electric truck model in 2015 and delivered the first Lion6 electric truck in 2021. We see this space becoming a big driver for our future expansion plans. The total cost of ownership is extremely favorable in this sector because the vehicles are being driven many hours per day. The rule of thumb is that the more you use an electric vehicle, the more you save money, so last mile and middle mile operations can benefit a lot from electrification. Apart from the sustainability aspect, operators are interested in having good profit margins, so this solution is top of mind for them. In fact, we are now seeing a lot of companies wanting to ditch their old diesel trucks and go towards a total electrification of their fleet. Case in point, we are ready for the fast development that is going to ensue in this sector as we can ramp up our 1,500 units truck production capacity in a timely manner.
The way in which materials for batteries are sourced have been a topic of increasing importance; how does Lion Electric make sure its operations are sustainable?
Our strong suit is manufacturing on both sides of the border, and we are trying to buy local as much as we can. The closer you are to customers and suppliers, the better it is in terms of carbon emissions. We employ a strong ESG policy, where the social factor is held in high esteem. For us, it is extremely important to know where the components are being built and due to this reason, in the next few years, we plan to totally exclude authoritarian countries from our suppliers list. The respect for employees, collective pride in our products and care for our customers are staples of our company and we want to extend this mindset across all our value chain. Furthermore, making sure the components will be recycled is also a priority and this is why we decided to build our own battery factory. We are constantly mediating with the legislators to address all the potential challenges linked to the mining sector in Canada so as to be able to stay true to our buy-local philosophy. That being said, we are super excited for the future and extremely grateful that we followed our instincts 15 years ago when Lion Electric was just setting foot in the electric vehicles’ world.
