British electric vehicle manufacturer Tevva Motors has said it intends to sue ElectraMeccanica Vehicles Corp (EMV) for $75m (£60.4m / €69.8m) damages after the Canadian e-mobility firm pulled the plug on their merger.
It’s planning to file a lawsuit in the United States District Court in Arizona, “seeking redress for the improper and unmerited purported termination” of the firms’ merger agreement.
The two companies had announced a merger in August, but ElectraMeccanica revealed it was terminating the plans at the start of October, citing “multiple incurable breaches of the agreement by Tevva, including failures by Tevva to disclose to ElectraMeccanica material information about Tevva”.
Tevva has now “strongly” refuted such claims and said it’s seeking redress for the “spurious, defamatory allegations” made against it and for the “thousands of hours of time spent by both parties evaluating and structuring a mutually beneficial business combination”.
It’s given ElectraMeccanica until 17 November 2023 to “reach an acceptable solution to this situation” before starting a lawsuit. Alongside the $75m in damages, this will also seek an injunction blocking ElectraMeccanica from entering into an alternative merger agreement, and “a protective order preventing EMV from dissipating its cash (which will be needed to pay Tevva’s damages) through dividends, executive compensation, and similar wasteful actions”.
Tevva has also stressed that while the lawsuit will enable it to “seek redress for the damages that have been caused by EMV’s wrongful conduct”, its operations and business plans are not dependent upon the case.
The business had said last month that it was exploring new merger opportunities, having “re-engaged with a number of investors and public companies who are seeking attractive, strategic merger partners such as Tevva” and restructured its leadership team.
The EV truck maker said it’s confident that it will secure both medium- and long-term funding that will allow it to complete its business plan and ramp up sales.
Tevva has also reported continued interest from customers in its 7.5t battery-electric truck, which entered mass production earlier this year after whole vehicle type approval.
It has a number of trucks in build for handover to customers, including TG Lynes in central London, which will mark the firm’s first battery-electric truck for use in central London.
ElectraMeccanica is yet to issue a public statement on Tevva’s claims but it said last month that it intended to “explore all legal recourse available to it in connection with Tevva’s material breaches of the arrangement agreement”. The business, which produces EVs including third-party products from its plant in Mesa, Arizona, said “exiting the agreement arrangement was our best option in terms of preserving opportunities to create shareholder value” and added that the Tevva deal wasn’t its only merger opportunity.
