Bankrupt electric bus and truck maker Lion Electric Co. will live on after a Quebec judge approved its sale to a consortium of Quebec-based investors.

Judge Michel Pinsonnault of the Quebec Superior Court approved a reverse vesting order, which cancels all issued and outstanding common shares of Lion Electric and maintains the licences, permits, certifications and regulatory approvals the company already secured. Certain excluded assets and excluded liabilities will be vested-out and transferred to newly incorporated companies.

The Quebec government has assured it will renew its subsidy program for electric buses, according to the Canadian Press.

Lion Electric will refocus on manufacturing electric school buses at its facility in Saint-Jerome, Que. where it is also headquartered, a far cry from the days when it operated a factory in Joliet, Ill. and had plans to also manufacture battery packs in Mirabel, Que.

The Saint-Jerome factory can produce 2,500 electric vehicles per year.

The consortium which bought Lion Electric is led by Pierre Wilkie and Vincent Chiara. Wilkie, a director of the company, is a businessman who co-owns MAC Metal Architectural. Chiara is the president of Montreal-based Group Mach, a real estate owner and developer.

Lion’s steady fall from grace

Lion Electric was once seen as an up-and-coming player in the electric transportation sector. It received over $150 million in investment from the Canadian and Quebec governments to make Quebec a hub for electric vehicle manufacturing. Private investors included Mach Group and the Mirella & Lino Saputo Foundation.

The company said it had over 2,100 of its vehicles on the road and was listed on the New York Stock Exchange. Its valuation at one point reached US$1.9 billion.

But a dramatic, rapid decline took place starting in late 2023. Slowing sales, delayed government aid in Canada and the U.S., and heavy debts (to the tune of just under $300 million in secured debts owed to creditors as of December 2024) defanged the company.

Approximately 1,300 employees have been laid off since its woes began.

It explored a sale and investment solicitation process to find potential buyers or investors to continue operations after seeking bankruptcy protection in December 2024.

Since Lion Electric showed signs of deep financial distress, several pitches were made to keep the company afloat.

Lion Electric investors considered creating a group in November 2024 for such a purpose, Le Journal de Montréal reported.

The Quebec government declined to participate in an investor-led plan to buy Lion Electric in early May.

Christine Fréchette, the provincial government’s economy minister, said, "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," CBC News reported.

Industry group applauds the sale

An industry association for Quebec’s public transit industry cheered on the decision to save Lion Electric.

In a release, the Fédération des transporteurs par autobus (FTA) said the move will ensure maintenance services of the approximately 1,300 Lion Electric school buses in Quebec will be retained.

"We are relieved to see that the hundreds of Lion electric buses currently on our roads will not be orphaned and that they will be entitled to the warranty and after-sales service they are due,” Luc Lafrance, president and CEO of the FTA, said.