Electric vehicle manufacturer Lion Electric, which is based in Canada but also builds school buses at its plant in Illinois, is cutting about 120 positions to match “current market dynamics.”

The impact is primarily in the company’s Canadian operations in Quebec, in overhead and product development. Company officials blame the latest round of workforce reduction on uncertainty around Canada’s Zero-Emission Transit Fund (ZETF).

That fund, launched in 2021, allows carriers to apply for funds to pay for zero-emission school and transit buses. Lion received several orders for buses in various provinces through the ZETF. But a company spokesperson indicated that implementation has been slow and difficult.

“In addition to having to complete a complex process, transporters who have submitted their documents are awaiting responses,” said Lion’s Joyce Stewart. “The timetable is not known, and delays continue to accumulate.”

Besides job reductions, Lion also is shelving some research and development projects, focusing instead on the LionC and LionD school buses and the Lion5, Lion6, and Lion8T trucks.

“We continue to make progress towards the start of commercial production of the Lion8 Tractor, scheduled for this summer,” Stewart said. “We are concentrating our efforts on these products.”

The latest workforce reduction and cost-cutting measures announced this week, combined with cuts implemented in November 2023 and February 2024, could save Lion about $40 million per year.

“We sincerely regret the impact of this decision on our valued employees,” said Marc Bedard, CEO and founder of Lion, in a news release. “We remain confident in our long-term growth and that of our industry and, keeping our focus on our profitability objectives and our production requirements, we will continue to work tirelessly on the execution of our business plan.”