Lion Electric gets $100 million in government cash for new battery plant

Lion Electric will construct a new battery plant in St-Jerome, north of Montreal, armed with $100 million in cash from the Canadian and Quebec governments.

The company manufactures all-electric trucks and buses, and says its new battery plant will help make its fleet less expensive. The new plant will create 135 jobs.

Canadian Prime Minister Justin Trudeau was on hand for the announcement, along with Quebec’s Premier, Francois Legault.

“People are aware that the recovery is going to be extremely important and the kind of jobs and investments that Lion Electric represents, the kind of future that we’re going to be building by making investments together, is extremely exciting,” Trudeau said at Montreal’s downtown convention centre.

Trudeau noted that “eighty per cent of the parts used by Lionel electric to build their vehicles are sourced from almost 300 Canadian suppliers.” In fact, 150 of those suppliers are based in Quebec.

“In Quebec, we are fortunate to have leaders such as Lion Electric to help build a greener, more durable economy,” said Quebec’s Premier, François Legault. “In the actual context of economic recovery, this is the type of initiative that can help Quebec differentiate itself in promising sectors, such as that of batteries, and one that my government commits to support.”

Legault added that “Right now, I really want us to be a major player in buses, trucks and also train and tramways.”

“We have a large majority of our energy coming from electricity. We don’t produce oil in Quebec, so economically every time we switch from oil to electricity we win. Not only for the environment but economically,” he said.

RELATED: Amazon to purchase up to 2,500 Lion Electric vehicles, can acquire 20%

New factory allows Lion to save big money on battery costs

Lion Electric’s electric school busses and trucks are particularly used in cities. Its customers include Amazon and CN. It announced plans to go public on the New York Stock Exchange Nov. 30, through a merger with Northern Genesis Acquisition Corp., a special purpose acquisition company.

It expects the factory to begin operations in early 2023, producing battery packs and modules made from Lithium-ion cells. The company will invest $185 million while the two governments will pitch in $50 million each.

Patrick Gervais, the company’s VP of marketing, previously told MTLinTECH that the plan is to break ground in March of this year.

With the new factory, Lion will design and build its own battery modules, which will allow the company to control the shape of batteries, optimize them for different conditions and buy battery cells from any supplier.

“Lion predicts to see a considerable reduction in the cost of its vehicle manufacturing while ensuring control and optimization… Given the battery is the most expensive component of an electric vehicle, this new manufacturing capability will have a direct impact on the development of heavy-duty electric transportation,” said a release.

With a planned yearly production capacity of 5 gigawatt-hours in battery storage, Lion will be able to electrify approximately 14,000 medium and heavy-duty vehicles annually. The factory will allow Lion Electric to spent less money in its battery system production and a stable line of procurement of battery packs.

The company expects to produce one battery module every 11 seconds and a full battery pack every 5 minutes. It will be the first Canadian manufacturer of medium and heavy-duty vehicles to equip itself with its own automated battery pack manufacturing capability.

“It will change a lot of things. First of all, the cost of the batteries will be a lot cheaper,” Lion Electric’s President, Marc Bedard told the Canadian Press’s Jacob Serebrin.

“Lion is synonymous with innovation and bold entrepreneurship, and a key player in Canada’s journey toward a sustainable, green growth future. Investments like the one announced today… position Canada as a leader in electric transportation,” said François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry.

Marc Bedard: Plant was supposed to be in the US

The company’s president, Bedard, told reporters that without the government assistance, the new plant would probably have been built in the United States. The company currently buys its battery cells and modules from other providers, representing 40 percent of the cost of an electric vehicle.

“It’s enormous,” Bedard said of the cost.

Lion Electric’s Patrick Gervais previously told MTLinTECH details about the new battery factory:

“Everything’s going to be here. It will create a lot of savings on GHG emissions and that will help us reduce our price per vehicle by 50 percent over the next four years,” said Gervais.

Lion Electric will also seek to build a vehicle manufacturing plant in the United States with the capacity to produce 20,000 vehicles.

“We are the number one in school bus electrification. We hope to be one of the leaders in heavy duty electric trucks,” added Gervais.

Currently, the company employs 465 people in its vehicle manufacturing facility.

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