Lion Electric is one of the latest companies in the trucking space to hook up with a specialized purpose acquisition company, known on Wall Street as a SPAC, to assist with its public financing.

On Nov. 30, Northern Genesis Acquisition said it would acquire Lion Electric in a reverse merger, which means Lion Electric will be able to trade on the New York Stock Exchange under the ticker symbol “LEV.” The deal is expected to close later this quarter.

Northern Genesis “shares our vision to build the best all-electric medium and heavy-duty urban vehicles in the market,” said Brian Alexander, Lion Electric director of public relations, in an email. “Their management team has extensive expertise in M&A, renewable energy, and sustainable utility that will benefit Lion beyond the initial business combination by further accelerating the electrification of commercial vehicles globally.”

The young Canadian OEM has received orders for 300 electric commercial vehicles, including a recent order from CN for 50 Class 8 trucks, and 10 Class 6 trucks for Amazon. Lion has more than 300 buses on the road in the United States and Canada, with more than 6 million miles driven, Alexander said.

With the reverse merger, Lion Electric now plans to offer three more Class 8 models in 2021. It has seven electric bus and truck models.

Lion Electric’s move is the latest SPAC activity on the front of green trucking. The combination of SPACs with a green trucking OEM appears to be an attractive one for many investors, even after the troubles run into by Nikola, which merged with a SPAC last winter.

What is a SPAC?

SPACs help companies such as Lion Electric get listed on stock exchanges faster than an initial public offering. SPACs are usually set up for a stock exchange listing for the sole purpose of acquiring up-and-coming companies that want to offer stock. Companies such as Lion Electric and Nikola keep their names, and little changes in terms of the business.

The use of a SPAC is sometimes called a reverse merger, because an existing publicly traded company acquires a private company for the purposes of taking the private company to a stock exchange. With SPACs, often the targets, such as Lion Electric or Nikola, are eyed from the get-go. The shell company is thus designed with the target in mind.

The incoming investment is attractive. Just by joining with Northern Genesis, Lion Electric hopes to raise more than $500 million in cash.

A rendering of a Lion Electric truck for Amazon. The Canadian OEM recently received an order from Amazon for 10 Class 6 trucks.
Courtesy of Lion Electric

SPACs and green trucking OEMs

Before Lion Electric, the best example in trucking of a SPAC in transport was Nikola, which faced dual problems of investor disinterest and a pandemic. The pandemic put off plans for an IPO, known as Plan B to Nikola officials, according to The Wall Street Journal.

Nikola decided on a SPAC and found a willing suitor in VectoIQ. On March 3, Nikola agreed to merge with VectoIQ. The new company remained NASDAQ-listed under a new ticker symbol “NKLA” and began trading as on June 4.

Nikola’s subsequent problems raised questions about SPACs, and how maybe many of the green-tech companies have not been vetted by the SPACs in the vigorous manner customary of IPOs. But SPACs continue to influence the transport industry.

In June, Hyliion, an electrified powertrain company that specializes in upgrading Class 8 trucks, became a publicly traded company by merging with Tortoise Acquisition. Hyliion also makes diesel hybrid configurations.

In August, electric truck OEM Lordstown Motors announced it would merge with DiamondPeak Holdings, a SPAC. Also that month, Canoo, a maker of electric work trucks and vans, merged with Hennessy Capital Acquisition Corp IV, getting the company on NASDAQ.

SPAC financing appears to be a trend throughout all industries. According to Transport Dive sister publication CFO Dive, using numbers from, 172 SPAC transactions raised about $63 billion in capital as of Nov. 10, 2020, with an average deal size of $367 million. That’s up from 20 deals raising $3.9 billion in 2015, averaging $195 million.

Who is Lion?

In 2008, founder Marc Bédard started Autobus Lion, an electric bus maker. In 2011, the Canadian government helped fund Lion with a 915,000 Canadian dollar loan. In 2017, Lion Electric rebranded and announced new product lines, including electric Class 8 trucks.

Lion Electric has more than 450 employees in the United States and Canada and plans to build additional plants in the United States, Alexander said.

Its current production facility is in Saint-Jérôme, Québec, with capacity to produce up to 2,500 vehicles per year. Lion Electric has a network of service centers where its vehicles are serviced and distributed. Locations are in California, New York, Washington, Florida and Arizona, with more in development, Alexander said.

The electric vehicles are capable of reaching up to 250 miles on a single charge, Alexander said, making them ideal for last-mile and short hauls.

“We trace our success to our single-minded focus on being a leader in designing, developing and building purpose built urban electric vehicles, vehicles which are specifically designed as delivery trucks, refuse trucks, bucket trucks, moving trucks, school buses and shuttle buses,” Alexander said.

Lion has more than 300 buses on the road in the United States and Canada, with more than 6 million miles driven.
Courtesy of Nuvve Corporation

The EV market heats up

The market is suddenly hot for such possibilities. New York City and other municipalities have been buying electric garbage trucks, and a new presidential administration led by President-elect Joe Biden (with his pick for Transportation secretary, Pete Buttigieg, if confirmed by the Senate) is likely to push OEMs toward battery-electric and fuel-cell electric vehicles.

Five years ago, selling battery-electric trucks would have been tough to do, according to Mike Roeth, executive director of the North American Council for Freight Efficiency. Trucks are heavy, and batteries would require too much weight, Roeth said.

“The future is bright for electrics.”

Mike Roeth

Executive director of the North American Council for Freight Efficiency

Now, Roeth is a believer, as he watches the industry improve BEV technology. Still, makers of BEVs and FCEVs will continue to have competition from diesel OEMs as well as innovators. Roeth said companies such as Hyliion are trying to improve efficiency for trucks by making hybrid diesel-electric models.

Hyliion also makes a model that uses natural gas to generate electricity as a fuel source for the truck. Nevertheless, Roeth said he believes electric models will be competitive in the industry.

“Diesel truck [OEMs] are not standing still,” said Roeth. “But the future is bright for electrics.”