"Concerned about being discovered with white elephants"

"Concerned about being discovered with white elephants"

Here's the lowdown on school transporters in Quebec, navigating the electric bus debacle:

The Electric Mess

School buses manufactured by Lion Electric, idling away in repair shops for weeks, not a rare sight these days. Struggling to find parts, uncertainty about warranties - it's a whole industry left scratching their heads.

"For instance, what's going to happen with the batteries?" ponders Stéphane Boisvert, the president of Autobus Séguin. "The vehicle was guaranteed for a year, but it was several years for the batteries. And the motor? We are in the dark."

With 75 electric buses out of their fleet of 350 school buses, Laval-based Autobus Séguin is one of the major customers of Lion in Quebec. Mr. Boisvert estimates that school transporters are the unsung victims in the downfall of Lion.

Across the industry, there's a palpable fear of ending up with stranded vehicles, i.e., ones for which after-sales service is no longer available, leaving each owner high and dry.

In other words, every bus owner is on their own.

Quebec's roads see around 1200 Lion-built vehicles rolling by.

"We're fretting about being stuck with white elephants," says Mr. Boisvert.

A Perfect Storm

So, how did we end up here?

Lion Electric, protected by its creditors since December, seemed to be on a comeback. A bunch of Quebec Inc. were keen to buy the company and refocus activities in Saint-Jérôme. But everything fell apart this week. The consortium was seeking a $24 million government reinvestment and the continuation of subsidies for domestically-assembled vehicles. As Lion was the only company fulfilling this criterion for models C and D (representing about 80% of Quebec school buses), the Legault government's decision to back down has left Lion hanging by a thread. Unless there's an unexpected twist, the company is on a collision course towards dismantling.

"My transporters are in a tailspin," warns Luc Lafrance, president and CEO of the Federation of Bus Transportation (FTA).

Where will they source their parts? Who will handle electric maintenance?

Luc Lafrance, CEO of the Federation of Bus Transportation (FTA)

Over the past four months, school transporters have already experienced a taste of things to come, as Lion's activities have significantly reduced due to the Companies' Creditors Arrangement Act (CCAA). We managed to lay our hands on replacement parts like lights and small electric modules, but it wasn't a walk in the park.

"With Lion shut down, it wasn't a quick delivery," remarks Pierre Tourville, president of Autobus B. Dion. "In normal times, we would have bought directly from Lion."

The Estrie-based Autobus B. Dion operates 6 Lion-made buses in its fleet of 80 vehicles. What worries the manager? The time when it'll be necessary to make major repairs that will revolve around the electrical power supply.

Will there be technical assistance? That remains a challenge if Lion doesn't bounce back.

Autobus Séguin concurs. Its size allows it to rely on maintenance personnel capable of repairing electric models, but there are limits.

"Batteries and all high-voltage equipment, you need specialized equipment to even touch them," says Mr. Boisvert. When it comes to the engine, it's another kettle of fish.

Helping Hand from Competitors?

The turn of events is a peculiar one for the Legault government. In an effort to limit damages, they've called upon actors like Groupe Girardin, Autobus Thomas, and Autobus Leed Transit. These rivals of Lion accused Quebec of favoritism towards the Quebec company.

These constructors and distributors scolded the Legault government for changing the rules of the game by creating a quasi-monopoly in favor of Lion in the school bus segment.

"We will ensure, with companies like Girardin, like Thomas, that a follow-up will be done on the maintenance of the electric buses that have already been sold," said Prime Minister Legault, in a press scrum, Thursday at the National Assembly, without providing more details.

Girardin, Thomas, and Leed Transit stepping up could be feasible, given they agree to take up the mantle. But there's one condition sine qua non: access to a plethora of privileged data from Lion. It's not about traditional mechanics; it's about the source code of the software found in their buses. How this could be done, one can only speculate, but there's openness.

"We already have all the skills right now through Girardin and we are ready to be there so that Lion's clients are not left in the lurch," says Steve Girardin, vice-president of Girardin - which assembles an electric minibus in Drummondville. The tune is the same at Thomas, where they have been selling replacement parts for Lion models for a few months, says the president and CEO of the company, Véronique Dubé.

Slower than planned?

The downfall of Lion Electric seems to slow down the electrification ambitions of the Legault government. Environment Minister Benoit Charette suggests a delay in targets. He had planned for the province's school bus fleet to be electrified by 65% by the end of the decade. "We are evaluating the entire electrification aspect, both through school buses and other commitments that have been made," he said.

References:

1. "(Le Monde) 2022-05-13: The fall of Lion Electric exposes the fragility of Quebec's electric bus ambitions - May 13, 2022"
2. "Electrifying Quebec’s School Bus Fleet: Progress and Challenges - Clean Energy Canada"
3. "A selective update on the formal electric vehicle fire hazard issues - CNBC"
4. "BCPQN: Sherbrooke College’s rapid charging station - April 26, 2023"
5. Stéphane Boisvert, the president of Autobus Séguin, wonders about the future of the batteries in their electric buses, as they were guaranteed for several years, unlike the vehicle itself.
6. Across the industry, there's a growing concern about the potential of being stranded with electric school buses for which after-sales service is no longer available.
7. In Drummondville, Steve Girardin, vice-president of Girardin, expresses readiness to assist Lion Electric's clients, contingent upon access to Lion's privileged data and software source code.
8. Quebec's Environment Minister Benoit Charette suggests a potential delay in the province's target to have its school bus fleet electrified by 65% by the end of the decade, noting a review of the entire electrification strategy.
9. The current predicament involving Lion Electric's electric school buses has led some competitors, including Groupe Girardin, Autobus Thomas, and Autobus Leed Transit, to call out the Quebec government for perceived favoritism.

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