ElectraMeccanica, the maker of the tiny three-wheeled Solo electric vehicle, will merge with U.K.-based truck manufacturer Tevva in a bid to grow their combined market share for electric trucks, the companies said Tuesday.

The merger represents a pivot for ElectraMeccanica, which struggled to produce its small electric vehicle profitably. After a recall in February, ElectraMeccanica was forced to discontinue the Solo vehicle. By focusing on medium- and heavy-duty commercial electric trucks, a fast-growing segment in the global EV market, the company will be able to keep some of its operations alive.

For Tevva, the merger is an opportunity to grow in the U.K. and Europe, enter the U.S. market and produce more trucks at ElectraMeccanica’s plant in Mesa, Arizona.

The Mesa plant is expected to begin production in 2025 and reach full capacity in 2026. It’ll be able to produce 10,000 units of Tevva’s 7.5T model electric commercial truck, according to a company spokesperson. Tevva recently began delivering the 7.5T to commercial fleet customers and is currently producing that model in its U.K. factory at a capacity of 3,500 units.“Our operations complement one another,” said ElectraMeccanica’s CEO Susan Docherty in a statement.  “ElectraMeccanica’s U.S. footprint and Tevva’s experience in the U.K. and EU; our collective go-to-market and engineering expertise; our respective Mesa, Arizona, and Tilbury, United Kingdom, facilities; and our balance sheet as well as public listing alongside Tevva’s commercially ready products and significant customer list.”

Docherty also noted that the electric truck market, unlike the electric three-wheeler market, is eligible for U.S. government incentives like the $1 billion set aside for electrifying heavy-duty trucks and an up to $40,000 rebate per medium-duty commercial vehicle.

ElectraMeccanica’s stock rose 19% on the news. The company will continue trading publicly as SOLO until the closing of the deal, which is expected to happen in the fourth quarter. If the proposed merger is approved by shareholders, the combined company will begin trading as Tevva, Inc., under the ticker TVVA.Once the transaction goes through, ElectraMeccanica shareholders will hold 23.5% of the combined company, with Tevva shareholders taking the remaining $76.5%, according to regulatory filings.

ElectraMeccanica and Tevva expect the merger to bring in about $5 million in run-rate annual cost savings by the end of 2024 and a revenue of $1.3 billion to $1.5 billion by 2028.

The combined company will have a cash balance of $70 million to $80 million, with debt of around $26 million. ElectraMeccanica will also provide a $6 million credit facility to Tevva, which can be drawn in whole or in part until the deal is closed, to be used as working capital.

Docherty will become CEO of the combined company. David Roberts, current director of Tevva, will become executive chairman of the new Tevva, Inc.

The combined company will consist of nine directors, four from ElectraMeccanica and five from Tevva.