Lion Electric Co. Shares Rise 12% Amid Increased Orders and Deliveries
The electric truck company’s stock price reached $4.85 at 2:45 p.m. Toronto time on Friday, marking a 12% increase this week following the release of its third quarter results. Despite the surge, shares are still down around 60% for the year.
Third Quarter Results: A Mixed Bag
While Lion Electric reported a net loss of US$17.2 million, investors appear enthusiastic about the company’s order book, which includes 2,408 electric medium- and heavy-duty vehicles valued at $575 million. This represents an increase of 51 orders from the previous quarter.
The Clean School Bus Program: A Boost for Lion Electric
The U.S. Environmental Protection Agency’s (EPA) Clean School Bus Program has awarded US$1 billion to 389 school districts for electric and low-emission school buses, part of President Joe Biden’s Bipartisan Infrastructure Law. This funding is expected to boost the demand for Lion Electric’s products.
Lion Electric Receives Vouchers Worth $82 Million
School districts across the U.S. filed applications for EPA vouchers through Lion. The company has received 207 vouchers totaling US$82 million, which will go toward the purchase of Lion Electric school buses. As of now, the company has received orders for 49 school buses.
Deliveries on the Rise
The company delivered 156 vehicles in Q3, an increase of 116 compared to the 40 delivered in the same period last year. This marks the fourth consecutive quarter that Lion Electric has delivered a record number of vehicles in its history.
Supply Chain Issues Continue to Pose Challenges
Despite the increase in deliveries and orders, supply chain issues continue to slow the rollout of the vehicles. The company couldn’t finish assembly of certain vehicles and had excess inventory as a result. However, management remains optimistic that the worst of these difficulties are behind them.
A Look Ahead: Manufacturing Capacity and Profit Margins
The company is building up its manufacturing capacity, which is having a negative impact on gross profit margins. CFO Nicolas Brunet noted that as the company scales production, profit margins will improve.
Key Takeaways
- Lion Electric’s stock price has risen 12% this week following the release of its third quarter results.
- The company’s order book includes 2,408 electric medium- and heavy-duty vehicles valued at $575 million.
- The Clean School Bus Program is expected to boost demand for Lion Electric’s products.
- Supply chain issues continue to pose challenges for the company.
