Tevva Initiates Legal Action Against ElectraMeccanica in Arizona

Tevva Initiates Legal Action Against ElectraMeccanica in Arizona

A British OEM company is in pursuit of $75 million in funding and has extended the deadline for a former business partner.

Tevva Motors Ltd. has taken legal action against ElectraMeccanica Vehicles Corp. in a United States District Court in Arizona, according to a spokesperson on November 6. This legal dispute arises from the former collaboration between the two companies to create a Class 8 hydrogen-powered truck.

Tevva, a truck manufacturer based in the UK, is pursuing a remedy for what it views as the unjust and unfounded termination of their proposed merger with ElectraMeccanica, which is headquartered in Burnaby, British Columbia and operates a facility in Arizona designated for the production of the Class 8 truck.

The lawsuit alleges that ElectraMeccanica has made baseless, damaging claims in an apparent effort to rationalize its sudden termination of a binding merger agreement with Tevva.

Tevva has also filed a lawsuit against Susan Docherty, the CEO of ElectraMeccanica.

When contacted by Transport Topics, ElectraMeccanica chose not to provide a comment.

Tevva has not yet officially served ElectraMeccanica with the lawsuit. Their spokesperson mentioned that they have given ElectraMeccanica until November 17 to address the demands of the original equipment manufacturer.

Tevva, a company based in Tilbury, England, had previously hinted at legal action on October 23. This was in response to ElectraMeccanica abruptly terminating their business partnership without prior notice. Tevva’s primary objectives include seeking $75 million in compensation and obtaining an injunction that prevents ElectraMeccanica from pursuing an alternative merger agreement.

Additionally, Tevva is seeking a “protective order” that would stop ElectraMeccanica from depleting its cash reserves, which may be required to cover the damages owed to Tevva. This order would specifically prohibit actions such as paying dividends, executive compensation, and any other wasteful financial actions.

ElectraMeccanica terminated the merger on October 4, citing “multiple incurable breaches” of the merger agreement by Tevva, which included a failure to disclose important information. ElectraMeccanica announced on October 4 their intention to pursue legal remedies due to these alleged breaches and demanded the repayment of $6 million, along with any accrued interest, that they had previously lent to Tevva, with a deadline set for January 2.

Both companies had originally planned to collaborate on the development of a hybrid electric and hydrogen-powered Class 8 truck in Arizona.

ElectraMeccanica possesses a 235,000-square-foot facility located in Mesa, Arizona. In September, Docherty announced that they would initiate the mass production of a 19-metric-ton or 41,888-pound truck in 2027 at this facility.

The proposed vehicle was anticipated to be derived from a 7.5-ton truck manufactured by Tevva.

Tevva is actively seeking new partners to engage in the serial production of their existing trucks. In a statement made on November 3, they clarified that their ongoing production wasn’t contingent on any claims or damages they were pursuing from ElectraMeccanica.

ElectraMeccanica is also actively seeking new partners. In an October 12 letter to shareholders, Docherty mentioned that several companies had already expressed interest in collaborating with ElectraMeccanica. Some of these companies had previously engaged in discussions with ElectraMeccanica before the brief merger with Tevva was announced.

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