Dive Brief:
- Canada-based electric truck, bus and battery manufacturing startup Lion Electric is cutting 150 jobs, about 10% of its head count, according to a Nov. 27 company press release.
- Lion Electric said the layoffs seek to rationalize the company’s cost structure and improve its ability to reach profitability objectives.
- The layoffs will affect employees in production overhead, manufacturing, product development and administrative functions, both in Canada and the United States.
Dive Insight:
Lion Electric is among several EV battery and auto startups that are reducing staff amid slowing EV demand and uncertain economic conditions.
"Although this was a very difficult decision and we are sad to part ways with valued employees, this initiative was the right thing to do for the business at this point in time,” Marc Bedard, CEO and founder of Lion Electric, said in a statement. "I am confident that the workforce remaining in place is more than capable to continue growing Lion's leadership.”
The layoff news comes after the company raised about $142 million in July to help fund the company's working capital and growth, including through expansion projects in Mirabel, Quebec, and Joliet, Illinois, according to a press release.
Lion Electric opened its first U.S. plant in Joliet this July, its largest EV production facility with an expected manufacturing capacity of 2,500 all-electric school buses at the end of 2023. At full capacity, the plant will be able to produce 20,000 vehicles a year – including electric trucks and buses – and employ 1,400 workers, according to Lion Electric.
The Mirabel battery manufacturing facility, which is still awaiting on final certification of the first battery pack model, is still on target to reach a production capacity of 1.7 gigawatt hour by the end of this year, according to the company's Q3 earnings call.
In the quarter, the startup reported a net loss of $19.9 million, more than $2 million more lost compared to the same quarter last year. However, the company also delivered 245 vehicles in the quarter, 89 more than it did in Q3 2022.
Lion isn’t the only electric vehicle and battery maker with workforce reductions this year.
This November, LG Energy Solution announced it was laying off roughly 170 employees between December 2023 and January 2024 due to slower-than-expected EV demand. The company develops EV batteries for U.S. automakers like Volvo, Stellantis, Ford and General Motors.
Meanwhile, Our Next Energy, a Michigan-based EV battery startup that had raised $300 million in a June Series B funding round, had cut 25% of staff as of Monday, according to Reuters.
