The revival of Quebec’s subsidies for electric school buses helped spark a last-minute deal with investors to acquire Lion Electric

Lion Electric, a St-Jérôme, Que.-based manufacturer of electric buses, has been bought by a group of Quebec investors.

The investor consortium is led by Vincent Chiara, president of Quebec real estate powerhouse Groupe MACH, and Pierre Wilkie, a director on Lion Electric’s board.

The deal comes after months of financial instability, mounting debt and unsuccessful acquisition talks. In late 2023 Lion began laying off employees across North America, culminating in its filing for creditor protection in December 2024 in Canada and Chapter 15 bankruptcy in the U.S.

At that time, a court-appointed monitor revealed that the company owed more than $244 million to secured and unsecured creditors.

An earlier acquisition offer was made by the same group of investors, but it was contingent on $24 million in direct public funding from the Quebec government.

The province, however, declined the funding, citing that it would be irresponsible to invest more government money into Lion Electric. Quebec Premier François Legault also said his government already stood to lose approximately $140 million from its existing investments in Lion.

Rocky rescue with renewed subsidiary

However, while the province refused to directly bail out Lion, the Quebec government came back with an updated policy in May.

Quebec announced it will renew its subsidy program for electric school buses, which had expired in March. The subsidiary program played a key role in the growth of Lion in the province.

Around 1,600 electric school buses are operating in the province and about 1,175 of those are manufactured by Lion.

With the subsidiary program reinstated, the investor group submitted a revised offer to buy the company. This time it was accepted.

“It wasn’t easy to get to where we are this morning,” said Guy Martel, a lawyer representing Lion Electric, during a court hearing on May 16.

“It’s a result, but it’s still not what we had hoped for at the very beginning of the process.”

Under the terms of the agreement, Lion will retain its manufacturing facility in St-Jérôme. However, the company will make permanent workforce cuts and has already shuttered its Joliet, Illinois bus plant and its battery pack assembly site in Mirabel, Que.

The revitalized subsidy program is a cornerstone of Quebec’s broader goal to electrify 65 per cent of its 11,500-vehicle school bus fleet by 2030.

The government has committed to providing $480 million in funding through 2028.

Each vehicle purchase may receive up to $240,000 — up from the previous cap of $175,000.