British electric truck maker Tevva has “re-engaged” with several possible merger partners following ElectraMeccanica’s (SOLO.O) decision to cancel their planned deal earlier this month. The company also said on Monday it has several trucks in production and is focused on delivering on its promises to customers.
Tevva, which aims to be a global leader in electric trucks for commercial fleets, is already in the process of expanding its manufacturing capacity to meet demand for its current model, a 7.5-ton battery-powered truck with a fuel cell range extender that can drive for up to 300 miles on a single charge. The company is also working on a 12-ton version due in 2023 and a 19-ton hydrogen fuel cell electric vehicle planned for 2024.
The company also focuses on managing the most expensive item on its trucks — the lithium-ion batteries. It is committed to ‘circular economy’ principles and zero waste and has signed up for a partnership with lithium-ion expert Ecobat. “We believe that by leveraging the full potential of our partnership with Ecobat, we can deliver a complete electric solution and maximize value for our customers,” Tevva CEO Asher Bennett said in a statement.
However, the company has faced many challenges, including a lawsuit from aluminum supplier Haleigh Casting for missed payments that totaled more than $106,000 and a reversal of its profit forecast after laying off a substantial proportion of its staff. The Essex-based firm raised more than $100 million from investors and had a market capitalization of $1.6 billion in April. However, it rocked close to bankruptcy at one point this year when it announced that it was pulling back its plans for a new electric car and would concentrate on its trucks.
Earlier this year, Tevva became the first British company to win European Community whole-vehicle type approval for its 7.5-ton electric truck and started shipping the vehicles to customers such as Royal Mail and Travis Perkins. It has received orders for more than 1,000 of its trucks in Europe, and the company is looking at other markets, including North America.
Tevva’s stock jumped by nearly 16% to $19.01 in premarket trading. The company is expected to combine with ElectraMeccanica to form a new company that will operate as Tevva Inc. and trade on the Nasdaq stock exchange under the ticker symbol TVVA, subject to shareholder and regulatory approval. Under the terms of the deal, ElectraMeccanica shareholders will own 23.5% of the combined company and Tevva shareholders 76.5% on a fully diluted basis. Upon closing of the deal, ElectraMeccanica will be led by Susan Docherty, while Tevva’s executive chairman, David Roberts, will become the combined company’s executive chairman. The companies expect the merger to result in $5 million in run-rate annual cost savings by the end of 2024 and to generate revenue of up to $1.5 billion in 2028. The transaction is expected to close in the fourth quarter of 2023.