Lion, one of Canada’s top-tier commercial EV makers, wants to start making its own batteries. Financing will decide if it happens in Quebec or the U.S.

First the good news: Lion Electric Co. — one of Canada’s brightest lights in electric truck and bus manufacture — says it is in the market for up to $200 million to build its own battery plant.

The catch? Marc Bédard, CEO of the Saint-Jérôme, Que.,-based company, says he wants to build the plant in its home province, but financing challenges — and “Buy America” demands from its growing portfolio of U.S. clients — mean he’s facing a lot of pressure to build it stateside, according to reporting yesterday in La Presse.

“This plant will be truly exceptional because it will be at the cutting edge of technology, robotic and automated. We have nothing to envy of the biggest manufacturers in the world with this plant. It will take about a year and a half to set up. We want it to be fully operational over the next two years,” said Bédard, speaking earlier this week at the Forum Productivité Innovation 2020, an initiative of Investissement Québec.

Latest step up

The move represents the latest big step up for the commercial EV maker — after it also recently announced plans to build a truck plant in the U.S. and struck a partnership with charging giant ABB to market its own vehicle charging systems.

When it comes to batteries, Lion already produces battery packs at its Saint-Jérôme facility. But there the company relies on third-party component suppliers. Having a dedicated facility means Lion would be able to create its own modules and streamline the integration of battery packs into its vehicles — a lineup that includes school and transit buses and urban Class 6 and Class 8 trucks.

Bédard said the location decision on the new battery plant will hinge mainly on where the financing comes from. If the majority of the $200 million comes from American investors there will be pressure to base the factory there. From the beginning Lion has been committed to having a robust presence in Quebec, but increasingly the lion’s share of Lion’s sales are happening south of the border.

“Our goal is to have this plant in Quebec, but we have a lot of pressure to set up this plant elsewhere on the American side because we do a lot of sales in the United States and they are on the rise,” said Bédard.

Production to skyrocket

Lion’s production is forecast to “skyrocket” in the next few years, according to Bédard, with the company rapidly expanding further into electric trucks. By 2021 the company is planning on manufacturing electrified dumpsters for waste trucks, electric refrigerated boxes for trucks and 100 per cent electrified bucket trucks.

“We have a goal of producing thousands of vehicles in the next few years and we want the battery plant that we will set up to be able to do everything to meet our production needs,” said Bédard.

Given the market demand for electric trucks it’s likely Lion — which has already secured an initial deal to supply 10 electric trucks to Amazon — could see the majority of its profits in truck sales.

Lion says the decision on funding and where the resulting battery factory will be located can be expected in early 2021.