MONTREAL — Quebec's opposition parties are calling for answers about whether Lion Electric Co. misled investors while receiving government financial aid.
The Quebec Liberals want a committee at the provincial legislature to investigate allegations the struggling electric-vehicle maker deceived investors with unrealistic forecasts and fabricated orders, pointing to $177 million in public funds the company has received from the Quebec government.
“If the company used government support to enrich its executives while misleading small investors, it is urgent to uncover the truth," Liberal MNA Monsef Derraji in a statement Thursday.
The call comes following the publication of a Radio-Canada investigation alleging that Lion Electric announced agreements with potential buyers for large numbers of electric buses and trucks, but never publicized when the actual number of vehicles sold was lower than advertised.
The investigation also found a document distributed to investors in 2020 listing customers that now claim to have never had agreements with the company.
Lion Electric sought creditor protection last month with US$500 million in debt and has laid off most of its employees. In a statement Thursday, a company spokesman said the Radio-Canada report contained erroneous information, without specifying what the errors were.
"As a publicly traded Quebec company, Lion has complied, and continues to comply, with its disclosure obligations under applicable securities laws," Patrick Gervais, vice-president of marketing, communications and public affairs, said by email. He said the company would not comment further.
Provincial Economy Minister Christine Fréchette reacted to the Radio-Canada report Thursday, saying it is sad when small investors lose retirement savings, and she encouraged anyone who feels they were duped to contact Quebec's financial watchdog, the Autorité des marchés financiers.
"This company has responsibilities. It has to disclose a certain amount of information," she told reporters. "So we have to make sure that this information has been disclosed as it should be."
The Liberals want Fréchette to appear as part of a committee probe, along with Lion Electric CEO Marc Bédard and former economy minister Pierre Fitzgibbon. The opposition Parti Québécois and Québec solidaire are also calling for more investigation of the company.
A group that now numbers more than 1,300 investors, called Invest-Lion, has written to provincial and federal legislators demanding further investigation of Lion Electric.
Julien Fiset, one of the group's organizers, said Bédard described potential sales that didn’t come through as planned, including with online retailer Amazon.
The company entered a purchase agreement with Amazon in June 2020 for up to 500 electric trucks per year over five years. Bédard spoke widely about the deal, including during an appearance on CNBC’s Mad Money with Jim Cramer in January 2021.
“We have an agreement with them for the delivery of up to 2,500 units over the next five years,” he told Cramer. “This is the start of a very great, long-term, I hope, relationship.”
But the agreement didn’t require Amazon to purchase a set minimum number of trucks. Amazon says it has purchased only 10 trucks from Lion, which the company announced in the fall of 2020.
"Everything that they've communicated leads people to believe that this is an actual contract," Fiset said. "And then this turns into the sale of 10 trucks .... They should have communicated at some point that those orders were not going to come, and they never did that."
Fiset invested $20,000 in Lion Electric, and said his doubts about the company were allayed by the optimistic way Bédard and the Quebec government spoke about its prospects, even in the months before Lion Electric sought creditor protection. "I'm a pretty safe investor ... and I would usually have walked out of this earlier," he said.
He said he and other investors have contacted the Autorité des marchés financiers.
This report by The Canadian Press was first published Jan. 16, 2025.
Maura Forrest, The Canadian Press
