Incentives for qualifying Lion trucks range from $100,000 to $150,000 for purchase or lease for 48 months, depending on model. (Image: courtesy)
What to do with Lion Electric, dentalcorp and Stryker stocks? Here are some analyst recommendations that prices are likely to move in the near future. Note: The author may have a completely different opinion from the one expressed.
Lion Electric (LEV, $5.66): A new incentive program could revive truck orders
On July 11, the federal government announced an amount of US$547.5 million for the new incentive program for zero-emission medium and heavy-duty vehicles (iVMLZE). These amounts will be distributed over four years or until the available funds are exhausted.
Point-of-sale incentives of up to $1 million are designed to make it easier for Canadian organizations, provinces and municipalities that operate fleets of fewer than 10 vehicles to purchase and lease zero-emission heavy-duty vehicles, says Benoit Poirier of Desjardins Capital Markets.
“These federal rebates can be combined with other provincial or territorial incentive programs,” the analyst adds. Battery electric vehicles, plug-in hybrid vehicles and hydrogen fuel cell vehicles are eligible. Therefore, sixteen models of Lion5, Lion6 and Lion8 trucks are eligible.
Incentives for qualifying Lion trucks range from $100,000 to $150,000 for purchase or lease for 48 months, depending on model. Claim forms will be available in the coming months for buyers to submit a refund claim this fall.
Benoit Poirier welcomes this initiative, which shows that the federal government is serious about the electrification of transport and is extending its policy to the industrial sector.
This program follows America’s announcement of a $5 billion budget for zero-emission vehicle purchases (including $2.5 billion for bus purchases).
Most importantly, the analyst hopes the federal iVMLZE program will help refill Lion’s truck orders. “That’s welcome given the backlog has increased from 53 trucks in the fourth quarter to the cancellation of two orders in the first quarter,” he says. These numbers are well below the expected 250.
For 2022, Benoit Poirier is sticking to his forecast of 665 deliveries (165 trucks and 500 buses). Its model calls for deliveries of 2,065 units in 2023, 6,800 units in 2024 and 12,100 units in 2025.
The analyst also maintains a speculative buy rating and price target of $14, despite Lions stock down 73% from its August 2021 peak.