Emergence of EV vehicle supply chain in Canada accelerates growth for Lion Electric
Source：Driving
From：Taiwan Trade Center, Toronto
Update Time：2021/07/09
While many companies struggle with losses from COVID in the past year, it is not entirely the case for Quebec-based Lion Electric Co, a leading manufacturer of all-electric medium and heavy-duty urban vehicles.
Since May 2021, the company has listed publicly on both the New York Stock Exchange and the Toronto Stock Exchange, closed a merger with a special purpose acquisition company Northern Genesis Acquisition Corp. that raised about $500 million, and announced a new manufacturing facility in Illinois, to add to an existing facility in Quebec.
In Jun. 2021, the company revealed it would build its $185 million battery assembly plant, backed by $50 million loans from both the Quebec and federal governments, and a research and development center at the Montreal-Mirabel International Airport.
The flurry of recent activity also presents a case study in why the transition to electric vehicles is causing so many headaches for those trying to predict which companies will flourish and which will not.
By all accounts, the company’s growth is rapid. Lion Electric has 400 vehicles on the road already, and recently disclosed it has received more than 800 new vehicle orders for the next 12 months, with high-profile customers including Amazon Inc., Ikea, Sobeys as well as large school districts in North America.
Meanwhile, its first-quarter revenue rose to $6.2 million, up more than 416 percent year over year, from the $1.2 million earned in the first quarter of 2020.
And yet, analysts paused.
National Bank Financial called the first quarter a “miss,” noting the average sales price of a vehicle was only $259,000 versus its estimate of nearly $320,000. This mostly resulted from the mix of vehicle sales, with lower-cost buses being ordered — accounting for 75 percent of current order backlog — than trucks. The average cost per vehicle also came in higher than expected at $335,000 versus $272,000.
The National Bank analysts raised their expectations for vehicle sales, and stuck to their “outperform” rating of Lion Electric, even as they lowered their revenue forecast for 2021.
“Lion is still at an early stage of commercial sales, and we believe the focus over the next two years will be on growing its customer base, production capacity, and product portfolio,” National Bank Financial wrote. “We anticipate losses for the next few quarters with increased business and product development spending.”
Meanwhile, Marc Bedard, chief executive and founder of Lion Electric said his company has stopped giving financial guidance and is just happy that analysts have started paying attention.
Earlier this month, Lion Electric announced that First Student Inc., a large student transportation company based in Cinncinati, Oh., had ordered 260 electric school buses. Bedard added that although the company is currently selling more school buses than trucks, he expects that to shift.
While the company’s battery assembly plant at Mirabel-Montreal International Airport won’t be manufacturing batteries. It will import battery cells, likely from South Korea, at least until there is a supplier in Canada or the U.S., according to Bedard, and then assembling them into batteries for its own trucks and buses.
“The battery is a major cost of the vehicle, like 30 or 40 percent of the overall cost of the vehicle,” he said, “So we’re bringing down the costs” and managing against any potential shortage.
Some in Canada’s automotive industry are elated by what they see as the first signs of an electric vehicle supply chain sprouting up here in Canada.
Source: https://driving.ca/auto-news/industry/lion-electric-sees-rapid-growth-as-ev-vehicle-supply-chain-emerges-in-canada