REE Automotive CEO on Earnings Beat, Outlook for E.V. Industry

Well, first of all, thank you for having me. It's great to be here. The by-wire technology is very, very known to people but new to automotive. It's how airplanes fly, basically. There are no mechanical connections between the drive, steer, and brake components of the vehicle. So we basically have a vehicle that is run by software, by computers, by an array of computers. And why is it better? Well, because it's just better in every way in a sense that it's safer, it's easier to maneuver, it is more capable of making your own decisions, and it is scalable in a sense that you can design it better for function. So we are able to build vehicles that are better, more economic, and better utilized by the world's largest fleets that we work with. A couple of names to mention would probably be, I don't know, Penske and U-Haul.

Yes, so yeah, we just came off our probably best quarter ever earlier today. And we announced an investment of $45 million that was led by our biggest shareholder, M Investments, and Modine, who took a strategic investment in around as we were partnering with them on a strategic agreement around supply chain. And this is actually pivotal for the entire industry because where EV companies usually struggle is, you know, production hell, where it's very difficult to scale up. It's very difficult for new tech companies to move to scale. And that collaboration now with Modine, who is a very large player, global player in automotive, they have, I think, fiscal year revenue of about $17.2 billion, 400 plants across the world, 44 countries, 190,000 employees. The fact that they're going to be running our supply chain is critical because it allows us to scale faster. It allows our customers, the largest fleets and other OEMs that we work with, to count on us that we'll be able to scale faster, to have steady production. And for us as a company, as a tech company, to actually focus on what's important for us, which is our core, the tech. So I think this is really important. We also announced today that we've kicked off our U.S. production together with Roush Industries, and we're going to be assembling our full trucks, our full by-wire trucks, out of Michigan. And all in that is, when you know, we also show that we grew our demand. The demand has been growing for our product by 15% quarter over quarter, almost 300% year over year, where majority of the other industries, especially in EV, is showing a decline. So I think very strong demand there. So quite a nice picture.

Yeah, so on one hand, we're an automotive player, we're an OEM, so we can build our own trucks, certify them. We're the first ever to certify, have an FMVSS for by-wire vehicles on the road. However, our model ever since we started was to complete, not to compete. Our goal is to basically be the, if I may, the Intel inside for automotive for every OEM to be using our technology. So the idea is that we're going to give them our technology through the REEcorners, through those modules that control steering, braking, and drive, and they'll be able to complete the rest. They'll be able to put the cabin on it, the seating.

Well, I think it's one of the largest growing industries today in America, especially because if you think about, especially in the commercial vehicle market, in our segment which is 3 to 5, the yearly demand is about 240,000 and only a very small fraction of it is actually electrified. And up until now, the reason for not electrifying fleets was the lack of infrastructure, of charging infrastructure, which was solved in the last couple of years. And now fleets want to electrify more and more vehicles, but the problem is there is not enough product offering out there that meets their needs in terms of reliability, scalability, and range. And what we see for REE, this is the demand that we've been showing quarter over quarter here, is that our vehicles are actually meeting that demand. And we can see a very strong demand from large fleets that are interested in electrifying. And the reason they want to electrify is, of course, carbon neutrality and Earth, but not less important is that our electric vehicles in general, and our vehicle in particular, have lower TCO, total cost of ownership. So actually the fleet pays less, it costs the fleet less to operate those vehicles all the time.

Well, I'll tell them what I've been telling them for a while. We need to work together. I think electrifying the world's fleets and the world auto industry is a work that needs to be done collaboratively and joining forces. And each one of us should concentrate on their core. And by doing that, we can actually lift far more above our weight as opposed to compete against each other. This is why we're constantly looking on ways to collaborate, not to compete.

Today we actually announced today that we are working with three car makers that are interested in our technology.

That we did not yet announce, but...

No, it's wonderful to see you. And congratulations on a quarter which I know you said was a really great one. And we look forward to speaking with you in the future.

Thank you.