Nikola, a US-based company that develops zero-emission vehicles, has signed a definitive agreement to merge with VectoIQ.

Once complete, the combined firm will retain the brand name of Nikola and will focus on the development of next-generation smart transportation solutions.

The pro forma enterprise value of the combination is nearly $3.3bn.

Cash proceeds from the transaction come through a combination of VectoIQ’s cash in trust and a $525m private placement of common stock led by a group of institutional investors.

These proceeds will support Nikola’s growth and accelerate the production of zero-emission vehicles. It will also help to begin the construction of its manufacturing facility in Coolidge, Arizona.

After closing, current Nikola stockholders will hold a majority stake in the combined company.

Nikola founder and CEO Trevor Milton said: “The world is transitioning to zero-emission platforms and Nikola is the leader for heavy-duty vehicles. Sorry, there are no polls available at the moment.

“We believe we have a differentiated business model built on economics, not government subsidies. We now need to double down and speed up the timelines and get to market.”

Milton will assume the new role of executive chairman of the combined company, while VectoIQ CEO Stephen Girsky will join the board.

Girsky stated: “Nikola’s vision of a zero-emission future and ability to execute were key drivers in our decision.”

Nikola focuses on designing and manufacturing battery-electric and hydrogen-electric vehicles among others.

The company is said to have more than 14,000 preorders that can generate more than $10bn in potential revenue.

It plans to roll out a battery-electric truck next year and start the sales of hydrogen fuel-cell electric vehicles in 2023.