Lion Electric was once one of Quebec’s most visible bets on the shift to electric transportation, promising battery-powered school buses and commercial trucks at a time when governments and investors were pouring money into clean technology. That history is now under a different kind of scrutiny.
RCMP officers descended on Lion’s Saint-Jérôme facilities on October 21 as part of what federal police describe as an investment-fraud investigation involving the company’s past activities. The investigation began in February 2025 after complaints from more than 100 investors. Police have stressed that the search does not target Lion’s current ownership, and no arrests or criminal charges were announced when the operation began. The search nevertheless marks a significant escalation in questions that have followed Lion since its dramatic financial collapse in late 2024.
A Large Police Operation Put Lion Back in the Spotlight
The scale of the search immediately distinguished it from the legal and financial proceedings that had already surrounded Lion. Reports from the scene indicated that dozens of RCMP officers were deployed at the Saint-Jérôme headquarters, with some accounts putting the planned contingent at as many as 75 officers. Investigators were executing a search warrant and gathering material that included electronic equipment, documents and servers.
The RCMP said the size of the premises meant the search could continue for several days. Administrative employees were asked to leave portions of the facility while investigators worked, although police said efforts were being made to limit disruption to ongoing operations. Crucially, officers did not announce arrests or charges. Investigators said the material collected still has to be analyzed before police can determine whether criminal offences occurred. Local reporting indicated that the evidence-review process itself could take several months, making the search an investigative milestone rather than the conclusion of the case.
More Than 100 Investors Complained to Federal Police
According to the RCMP, the investigation began in February 2025 after police received complaints from more than 100 investors. The complaints concern Lion’s activities before its restructuring and change of ownership. Federal police have described the file as an investigation into possible investment fraud, while reporting around the probe has focused heavily on public information issued during Lion’s years as a publicly traded company.
Those concerns overlap with allegations raised by shareholders in a separate proposed Quebec securities class action. That case alleges investors were given misleading information about subjects including Lion’s financial condition, production capacity and order book. The proposed class covers investors who bought Lion securities during periods stretching from its May 2021 public-market debut through December 2024. Those allegations remain unproven, and the Quebec proceeding is still at the authorization stage. The civil case and RCMP investigation are separate processes, even though both examine questions surrounding what investors were told before Lion’s collapse.
Lion Entered Public Markets With Enormous Expectations
Lion’s rise helps explain why its downfall affected so many investors. The company became publicly traded in May 2021 after combining with special-purpose acquisition company Northern Genesis Acquisition Corp. The transaction and related private financing generated approximately US$490 million in net proceeds for Lion, while earlier deal announcements had valued the combined business at roughly US$1.9 billion.
The company was presenting an ambitious growth story at the time. In its first-quarter 2021 results, Lion reported an order book of 817 electric vehicles valued at more than US$225 million, including 608 buses and 209 trucks. It had delivered only 24 vehicles during that quarter but was expanding manufacturing, battery production and its workforce. Lion also highlighted relationships or orders involving major organizations and fleet operators as evidence that commercial electrification was moving beyond experimentation. For investors caught up in the EV boom, the combination of real vehicles, government support and large projected demand made Lion appear positioned for rapid expansion.
The Order Book Became One of the Most Important Numbers
Lion’s order book remained one of the company’s most closely watched indicators. As late as November 6, 2024, Lion reported an order book of 1,590 electric vehicles worth approximately US$420 million based on management’s estimates. It included 1,455 buses and 135 trucks. The figure looked substantial beside quarterly deliveries: Lion delivered just 89 vehicles during the third quarter of 2024.
There was an important qualification, however. Lion’s own securities filings warned that its order book should not be interpreted as a guarantee that every listed vehicle would become a completed sale. The company said the measure could include signed purchase orders, formally confirmed orders and vehicles tied to joint applications for government incentives. Substantially all vehicles in the November 2024 order book were subject to government subsidies or incentive programs. That distinction has become particularly significant because the proposed Quebec class action alleges investors were misled about the company’s order book and production prospects, while Lion’s public filings contained detailed warnings about conversion risks and delivery delays.
The Financial Deterioration Was Already Visible by Late 2024
By the second half of 2024, Lion’s financial results showed a company under severe pressure. Third-quarter revenue fell to US$30.6 million from US$80.3 million a year earlier. Vehicle deliveries dropped to 89 from 245. Lion recorded a US$16 million gross loss and a US$33.9 million net loss for the quarter, compared with a US$5.4 million gross profit and a US$19.9 million net loss one year earlier.
Liquidity problems soon overtook the operating challenges. Lion announced in December 2024 that relief periods connected to major lending agreements had expired and that it was in default under several debt instruments. Trading in its shares was halted. On December 18, the Quebec Superior Court granted Lion protection under the Companies’ Creditors Arrangement Act, with Deloitte Restructuring appointed as monitor. A court-supervised sale and investment process followed. By spring 2025, production had been suspended and a monitor’s report said staffing had been reduced to just 16 employees needed to support the restructuring and protect remaining assets.
Governments Had Put Significant Public Money Behind Lion
Lion’s troubles also became a political issue because its expansion had been supported with public money. In March 2021, the federal and Quebec governments announced nearly C$100 million in combined support for a Lion battery-pack assembly project valued at approximately C$185 million. Ottawa and Quebec were each expected to provide about C$50 million, reflecting a broader strategy to build a domestic electric-vehicle and battery industry.
The original project was expected to create 135 jobs after construction and another 150 over the longer term. By February 2026, federal officials told Parliament that about C$31 million of Ottawa’s Strategic Innovation Fund contribution had actually been disbursed. Quebec’s exposure went beyond the original battery-factory commitment through later financing and investment initiatives. The Canadian Press has reported that the Quebec government ultimately lost roughly C$140 million connected with Lion. Those losses turned what had once been promoted as an industrial-policy success story into a broader debate about government due diligence and the risks of financing rapidly expanding clean-technology companies.
Other Legal Proceedings Have Added to the Scrutiny
The RCMP investigation is only one of several legal developments involving Lion’s past. In February 2025, shareholders filed a proposed securities class action in Quebec alleging false or misleading representations and omissions concerning the company’s financial health, products, production capabilities and order book. The case names former directors and officers along with other defendants. As of October 2026, it remained at a preliminary authorization stage, meaning the underlying allegations have not been established in court.
A separate regulatory case also emerged shortly before the RCMP search. Quebec’s Autorité des marchés financiers announced on October 13 that the Financial Markets Administrative Tribunal had approved a settlement involving investor Claude Roy. Roy admitted trading Lion securities in November and December 2024 while possessing privileged information relating to a possible acquisition and planned creditor-protection filing. The regulator said nine share-sale transactions allowed him to avoid C$792,640 in losses. He received an administrative penalty of C$1,109,691 and a two-year market-trading prohibition. That matter is distinct from the RCMP investigation.
Today’s Lion Has Different Owners
One of the most important distinctions in the police investigation is the separation between Lion’s historical activities and the business operating today. Following the CCAA restructuring process, a Quebec investor consortium operating through 9539-5034 Québec Inc. completed its acquisition of Lion on May 23, 2025. The transaction followed approval from the Quebec Superior Court through a reverse-vesting structure.
Under the restructuring, the legacy publicly traded ownership was effectively eliminated. Lion disclosed that its outstanding common shares, options, warrants and other instruments convertible into shares were cancelled for no consideration, while the purchaser subscribed for a new class of shares and became Lion’s sole shareholder. The RCMP specifically said its October 2026 operation relates to past activities and is not aimed at the company’s current iteration or new owner. Lion has said it is cooperating with authorities. That distinction matters both legally and commercially: investigators may be searching the same corporate facilities, but they are examining conduct associated with an earlier chapter of the business.
The Biggest Questions Will Take Time to Answer
The RCMP search does not establish that anyone committed investment fraud. It gives investigators access to evidence they believe may be relevant to determining what happened, but police have said the seized material must be examined before decisions about possible criminal offences can be made. With electronic records, corporate communications and financial documents potentially involved, that review may take months.
For former shareholders, the investigation adds a criminal-law dimension to a story already unfolding through insolvency court, securities litigation and regulatory enforcement. The central questions are likely to remain familiar: whether public statements fairly represented Lion’s sales prospects and financial position, what executives and other insiders knew as conditions deteriorated, and whether investors received the information securities laws required. For the current Lion Electric, the challenge is different — rebuilding a viable electric-bus business while an investigation into the company’s past plays out around it. Until the RCMP completes its analysis, allegations of criminal wrongdoing remain allegations, and no criminal responsibility has been established.
