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REE Automotive (REE)

Participants
Limor Gruber Director of Investor Relations
Daniel Barel Co-Founder & Chief Executive Officer
Hai Aviv Chief Financial Officer
Mike Shlisky D.A. Davidson
Jeff Osborne Cowen
Igor Levi BTIG
Call transcript
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Operator

Greetings and welcome to the REE Automotive Second Quarter 2021 Earnings Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Limor Gruber, Director of Investor Relations. Limor. you, Thank

begin. You may

Limor Gruber

the actual investors.ree.auto. operator, assumptions Any second and you've for you, plans, from of projections, may affect morning forward-looking you our many you obligation statements. expectations, future any to and that our company's strategies, different and statements today's which forward-looking describing thank the for recent assume of XXXX to We conference our statements. our beyond Exchange call Please update results. at this quarter earlier that publicly such may forward-looking anticipated by Securities identify our principal release joining would results call. note other are like with business, see press a remind are statements. Thank reasons, that forward-looking control. include issued all and no could I risks statements We our seen goals, prospects the forecasts Commission, hope beliefs, that filing and variety Please which uncertainties

a measures will EBITDA, directly be adjusted non-GAAP of GAAP measures release certain financial discussing see income filing providing non-GAAP most measures. EPS. or including our and for we non-GAAP these Please EBITDA today, and to margin, adjusted their addition, net reconciliation comparable In

over Officer, with Co-Founder Joining Daniel, update, operations Aviv, open an Daniel Barel, I our questions. point, continue to will on me as At overview Executive financial Hai Chief business your up call we please. turn well our who today discussion for before Daniel. give the Financial will our call and and results who Chief of the the outlook, is this Officer, and will our provide as an

Daniel Barel

Limor. you, Thank

building release and future REE talking before get I for way into yet business as our When cars is ago, mobility, to briefly public overview. a the everybody conference of eight company, call about story outline we this the over REE century. the years we the same was Given started first and would like a earning

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the sales to month, expect leading automakers this the a targets the vehicles the of target earlier of example, electric For are for meet. in the US in all XX% up Industry vehicle which XXXX, we vehicle by quicken pace adaptation government to to US of announced experts believe aligned make electric US.

differentiate we coming platforms significantly EV that REE’s new to modular is our grow reduce time that years. and Given in driver another believe, for this supports to the yet ability market EVs,

whether vehicles, the module, for a technology REEcorner lot the and changing vehicle REE, control the single manufacturing value is fundamentally chassis As the components material powertrain based are in which between still located constrains or modularity we're of Today, the are The and still the design vehicle steering, At approach. the critical components wheel. only by and electric. I patented internal where substitution to has functionality. configuration, approach added built essentially such combustion and on suspension, and of EV The as integrating between differentiated an unchanged. wheels, vehicles not into electric of compact difference system of being process is that stated changed a original earlier, supported rest one. motor the manufacturing combustion built, an are braking,

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our the will our mind, be Austin, location headquarters network our site, and we allow world's commercial announced our to jointly Texas, recently global multiple X vendors' production A and with our propulsion new will customer Tier to also and vetted partners and suppliers, collaborate in in will others, integration leading American of integrated Axle. is support good which first With continue us centers. be vehicle in goals. example to and which first recent such which programs secured solidification of Integration our develop this subsystems, Maxion, close We we system, and North to with the a American lightweight production our agreement grow customers. built, assembled to That as, be manufacturing Center to efficient on in chain our supply development Musashi, KYB, electric from

standard. creating plans execute make progress accordance and continue us by enable will that our the in We industry A become with of opportunities, to multitude to

to we long-term stakeholders. build the that, will Hai. call I With to for As continue turn our value

Hai Aviv

Thank connect some for important the would spend was and year we a to our the June many with you, XXXX. not we remember, together that assess of It public for our ended is entire milestones Daniel. reached. dots financials market quarter commercial second for our the the far, achieved customers and along drivers I now XXth agreements, forecast, financial to like will with I a the overtime. work company, determine milestones, address volume. so to the quarter, the five a of potential our moment, In second forecasted to performance of to REE

Kingdom. British to Toyota The into United of Technology secure engineering initiate completing grow engineers. purchase the the of orders successfully, the Motors program and full we location order concept mostly is would next Hino Following have to At for which Show we an the powered the is revenue testing. opened Automotive time MIRA in highly our global next our from of the the pool. talent Film tap production staffed a next in stage, successful The will Engineering commercial generation. to employees, June, when And of a customers, milestone qualified end a of customer Park Center At code public behalf After local Industry our workforce. already was of with milestone us XX kick in allows Once our completed the evaluation Arm which the to joining we term receive we dates long strengthening said evaluation entered this when signing, Tokyo milestone place REE. from XXXX. lead in the February, April, verified to completed centers and Unit this The or with in prototypes, back an the Truck Motor In MOU, from we’ve that prototypes relationship. network. and vendor alliance platform signed code. our advancing suppliers, customer nominate successfully, non-public we our our code. previously by presented In Once non-public is customer

important alliance or duty and to strong X. is to X Our as truck enter major as move with light such Hino Class we cooperation, global the market medium

EVs a teams develop In to to and Magna markets identify jointly agreement strategic vehicle as to development bring go to collaboration well signed addition, opportunities, market market as International with and modular we customers. establish

one the mobility Europe as not with America, collaboration new in segment, service segments is but and also commercialization growing fastest a plans advances North Magna EV, in in Our of of mobility a the market. the which model our only

agreement countries a operations the autonomous vehicles, driven development next-generation are vehicles, with Navya. by the by manufacture a the of currently, develop to powered REE XX leader Navya, in with which and autonomous and signed also We in

the EAVX. with end, foothold package delivery of Following NASDAQ. and docks US you Poindexter, and in the with We now end collaboration van Think the area at your with established our we potential JB the quarter XXX mail July, a listed market. in of merger walk-in close Capital significant see strategic on that the

via capitalized, at manufacturing capacity excess of well that XX over are assembly countries network utilizes even model integration point-of-sale our We CapEx-light centers. manufacturing an exclusive with global our in QXXXX

Turning results. to our quarter second

continue invest business. we and our in to As ramp

to related the stock of million XXXX of million, million first quarter non-cash in second $XX.X based The first quarter and Our in loss compensation increase quarter quarter is second compared $X.X $X.X to compared was the million primarily quarter and in GAAP XXXX, loss the the million to million, for compared quarter Non-GAAP previous the the net $XX million the $XX.X $XX.X net quarter. $XX.X to million for for second second of XXXX. $X.X was XXXX. of in of

our We with and to of technological XXXX cash $XX.X engineering second the $XX As invest as of continue cash million capabilities end quarter of in finished investment equivalents to we at and the XXXX. R&D. increased million, compared with

as July of cash $XXX late and accelerated gross the equivalents expect of start our of finished of the to us production strategic our of achieve approximately quarter further we XX.X compared we second million, with million profit and XXXX. merger with at the With collaboration XXXX. end We received XXXX development, will the close support commercial to of position fund million, cash XXX, $XX which in

we With which us XXX, with we the start will achieve of production merger gross to July fund close strategic million, received of the of $XXX late support and in XXXX. position profit further our commercial approximately accelerated expect collaboration development to our

launch a a in is of growth to $XX X,XXX in This or XX% program. total XXXX increase to by to continue The achieve target employee of non-GAAP compared million. ramp approximately support annual XX% a roughly Total full our additional we in operating time XX, in and add capital change end integrating $XX expectations are attributed commercial million. XXXX expenditures as to basis by spend XXXX. to $XX We to year to customer increased to expenditures on engineering expect will increase towards June compared previous and headcount million

including non-public additional our release for again our today, expect joint of to outlook, in commercial road global earnings Expand as secured We executing program, through and expansion we please. on you variety we with lines provided continue suppliers by up of that, by now growing filed with tests. Regarding first partnerships joining open capacity our network. us. Break chain to EV execute our Powered and can headquarters delivery earlier Center. of vendor on industry REE's the types penetration thank prototypes additional supply US the Extending leading REE. for questions, collaborations Integration And for ground

Operator

Thank Instructions] you. [Operator

Our Shlisky with Davidson. question. first proceed question comes from D.A. your Mike Please with

Mike Shlisky

guys. good question one Hi. evening, topics. One on two cost And and the I've I want Good the start morning, is to timeline. some is on got. other just with

any initial of agency? approvals clarify approvals Just is in how your in marry a us to trying you here? purchase vein, can to need top bottom first order? you any similar the obtain away And for give from Do a safety be, your the figure think far government to going with timeline can very are kind purchase the sense binding first to along safety you I'm platforms? far you before you as your out, how order you

Daniel Barel

is to six thanks To sales production sequence. mentioned answer drive is are as orders goes are to we or usually given for and things first every the path part will there for the that on the of purchase terms production explained outlook months then absolutely. question. high question Therefore, milestones, in as purchase Sure, that batch the Daniel, in a and of two prior purchase order. This you and different orders that orders your that production,

arrive, expect XXXX. start we towards production when So those we to

move order to is we binding or we or road of second testing. As road to in phase once public a non-public next order described order earlier, last testing, also the global a complete sales to there

your answers question. that hope I first So

classes On the the approvals. unfortunately, it different vehicle, is It second required depends. answer question, again, type or regulatory on vehicle the the of depends type different

of are the Some and being top to approval regulatory achieved hat. the the prior between platform those marriage

full But simulated, that be crash like some testing, vehicle. our with needs in a to itself, and be crash. naturally to body done on are test do for platform you some, have there And to have for tested example, crash example, full elements can testing for and seats example, but order

Mike Shlisky

I guess all today, in that that process all the homologated things you to I the the know, crash, the I started headlights, kind country. of each to for if taillight, mean, different all wanted have be

If within you first you is get started two years that do less -- your first a than two-year date? process? can production today, there -- it So, you

Daniel Barel

are plans. point. get this Yes, that's the plan, committed naturally, can't right, of you fully the our do fair And into is we listen, before to go And executing so. part production you clearance to

and So, more all account taken executing now we've of and clearly. into those we're

those on out focus us Let that we reaching set milestones to do.

Mike Shlisky

hire outlook are higher salaries, is expected, trying et your just cetera, to than on -- then my costs higher any was I past or going to higher higher your cost guess, benefits, outlook. -- the cost I to that sure question And make I ask faster? recently trying I'm folks past other been was want you things how mostly Okay. based get faster understand had the

Hai Aviv

Yes.

morning. So, and thank Mike, question the good and you Hai, this for is

count and the side. engineering. result, the cost of operating expectation other on million, a to the expenses XXXX, both customers. experienced first and to of in the we the XX% add grow as the potential both cost, partners in demand, expectation expenditure higher from and $XX So, we in from our we And And half disciplines terms increase by decided capital both --

Mike Shlisky

it's of not so because inflation. Okay,

Hai Aviv

Correct.

Mike Shlisky

leave it Appreciate Okay. there. Guys, so much. thanks I will it.

Hai Aviv

Thank you.

Operator

your [Operator comes Osborne Jeff Cowen. question Instructions] Please next Our with from Pacific question.

Jeff Osborne

XXXX. to more we gap guys. the could be and afternoon, between late on questions specific a now my I if was end. good couple on wondering bit Hey A try bridging

being or the there about have? the public when of prototypes REEcorners on think five timeframe different road? the when of road the when private out prototypes then least you we should be would is at And there, of So, a each that first

Daniel Barel

Yeah, Hi, Daniel, sure, and Jeff, good is this afternoon.

at to I right? think plan. at looking right, exactly we on needs meet we that if as quite it's, we meaning be everything completed then, it are it's Otherwise, at straightforward that if backwards, are we production So executing can't by look then look, we XXXX,

road non-public say mentioned prior in and of from I time you everything terms production. will to So occur would road that any basically, public testing

different that testing. Now mind keep and require different pre-production in programs might

jointly needs be and be can tested Some separately. to tested some

an that timeline also can that So few I'll is website there. testing. out, find on we think are those to aggregated demonstrated you tests there our quite a point road sit you can already non-public out

Jeff Osborne

videos are in other the would be referencing you're in desert the Got other of you built than it? the on newly the products of anticipate that So, in product that the of or is anticipate zipping calendar year, XXXX? second half Do or any that do private around? that roads videos you you any XXXX ones

Daniel Barel

executing, No, to during focused But as because and we the go we'll we're I we're continue evolve hot. everybody. this do make we that share with on are transparent hope and everything -- that we early we completely of beyond that desert that's we're everything doing more plan. the more for open doing and And don't to summer to as as as sure

Jeff Osborne

Got away me or prototypes you that can and on pre-production giving free? event, private just roads? are producing Hai, for for trigger costs remind it a revenue those and you them for Does

Hai Aviv

is in no revenues costs, currently, so can for recorded for Yeah, preproduction great see some question were be as so so revenues this -- recorded cases you far. a can

Jeff Osborne

calendar And do you anticipate XXXX? any revenue in

Hai Aviv

Yeah.

projection. next of we comfortable this five our feel find And course, projections So we the years. for with

based we on on these projections. based the revenues our So can expectations, meet

Jeff Osborne

more specific think million, in following Got the to on you increase as within accelerating. cycle XX up be for results that the have to any or guidance GAAP rest is as prior stock-based the compensation separate then it. outlook great question, on for just hear should development you And the question mix a And versus also to the then of on how commentary year? which we if Can Mike's about CapEx is OpEx that?

Hai Aviv

Yes.

So the haven't see question, integration operational for CapEx disclosed CapEx much mix in and the We we the go significantly you center between significantly we'll XXXX, expenses. was share can XXXX, in the expenditures open second your when up CapEx the first And Austin. the of quarter as than lower in anticipated OpEx. will

Jeff Osborne

a the for And number, think Is the one-time stock-based on year? quarter, comp event it? a a was in XX of rest about good to any Got thoughts that how the million second quarter? or

Hai Aviv

Yes, see, the stock-based as a And non-cash previous this volatile volatile. versus quarter. compare compensation stock-based it's to you if is in expect course, item. next to the you we compensation And be of quarter, been continue

We also – that's why we we more the provide preventative. which believe non-GAAP loss, also net is

Jeff Osborne

I all That's had. you. it? Got Thank

Operator

Thank you.

Our comes with Please Levi with Igor next from proceed question BTIG. question. your

Igor Levi

could Thank and Could Cost go kind the picture we both is the REEcorner more TCO, actual will from manufacturing savings and for guys. touch conventional manufacturing bit of the go looking details the in compared you reduced platform cost and user? flat modules at the well how the which on also process to a my the taking – at the questions. technology EV back step Ownership the the Total of more Hey, as the big change EV's? through time as you end and just And for

Daniel Barel

it’s Daniel. an long a Yes, the answer. sure, Igor. Thanks question, Well, bit of for that's

change developing and of more once the we've with idea every try So sometimes different you years know, let off and less, that The completely corner billions the and change as that in agnostic dollars drive market, it. faster vehicles REE time you of any for braking, invest or you six, it's And of motors, is get start you in all that me REEcorner both better I'll Why and suspension, platform technology in all -- resources. right? allowing modularity. And the new important? miss By try taken Because years or to chassis, fuel. the altogether REE kinds build billions steering, that dimensional we're X taking build everything technology inches, a to you same whole to to plan investment have the need to time I know. each to chassis, XX to something, change, it by is want if far through the platform. battery, any And of seven to please

be So of autonomous driven. manually or it then, course, could

you'd agnostic if So any full future that of proof, to dimensional changes like, sort.

broader modular at vehicle it customers allows end of give of the array address -- design it build complete service a we it's and to partners to cost. fraction type vehicles developed of want the So they any and that, us current and top to the on to very very, a our future, and of because freedom do much of flat

demonstrated do sizes Now question. there a XX I your that's over the the faster quite in years. than significantly first few kind think, years X faster, few by and part the different we and it shapes way, we've oh, of and past And to platforms And out recently years.

time, is question. us? first the is a quite cost extend merger and life lot to on time. prolonging of apples, do life about very of announcements et them that where to because for cost, maintenance, our capabilities that and the both part This key to made, to talked apples account the among hour. of ownership ability value, other now. second And the we for others operating quite only cetera. as vehicle not in just through compare year, to allowing went better strong down. and less the day, XXX. couple to ability I'll purchase that's So we an the in customer we've This of than at question, the is able we the end the note to is -- of upgraded into very things being a ability over vehicle our basically take whole in one and significantly competence over the replace dramatically few One, over use recent longer. very, serve because better TCL. significantly, TCL presented do and good mechanically takes are allowing that total excel of we a right the we've a our the And deck vehicle the corners those with time, a cycle lot And also But And those it your things; part compare we its of that costs, functionality by regarding a them we've residual keep over quite

our downtime an extremely can repair I Second, time and are as we a change in before, than said low corner less hour. since

XX%, XX% that the deliveries due of center gravity top technology, the so we route But let's pack packages the without vehicle, efficiency COGS. vehicle, up. -- our there's lengthy to cost time no Stop, and you can know, So you change same more, can part about put out let's you even the to where about some same somebody you of REEcorner come is an go least the the far say the you're more line in the than increasing of on Think dramatically needs the a last, of system. hour, we and less your understand deliver not going or CapEx And also significant. packages repair Pit think is than order on it vehicle that you Formula allow on but in what's wrong to One more, the more, sometimes meaning same tack with increasing because you important, doing investment say volumetric low driver a on you corner our can which customers, with for your very in, the like ability

it what's a technology. are just using examples how innovate these your of hope few our value proposition of the answers do and And I we So question.

Igor Levi

to on great. what over part the burn starts, next commercial until before then year start? quarter? I the what Thank then you -- watching the most for would be and productions discussion -- that of milestones about important should you. are second able touch question. is Yes, your milestones, wanted That And and follow-up answers on production per to earlier we the cash commercial definitely my is be a expected some until half could production

Daniel Barel

these right, All so questions. two different are

I the what very as think milestones today. So the said understanding is clearly, the to and really -- first is, I in do and we tried covered website. And earlier I give question that very we on to recently clear them to the think it's

look public different should you signing, global road record assess of as course, growth, each different from course, testing. would of testing, All paces network, -- of nomination which suppliers additional per and you And in production. agreement road new look data represents at, can lead this those at So program non-public is of our to exactly totally milestones, we're production. communicate, to points we trying out executing and and are you very execution many those good we are so now there plan to Naturally, on and but what a look the that on as getting mentioned think, different I advancement. very, focused our progress fully are, to

Igor Levi

Great. And the second part of the question regarding the cash burn?

Daniel Barel

annual projections same, both haven't one, the basis. we so cash burn the we’re annual side. still which same disclosed revenue an side the the and only on is the burn, stories, on cost That's quarterly cash on Yeah, the the keeping

last you are quarter-to-quarter, increasing one, because compared at If headcount you're growing. the if higher looking we operating and of the course, quarter, to QX were the previous expenses our XXXX

Igor Levi

you, Thank Okay. everybody.

Operator

questions, any time. There call to the like back no you. this turn further closing Thank to at are would management over I comments. for

Daniel Barel

and Yes. like strong organization, around value I, the I amazing creation the as appreciate REE this Thank you, Ahishay to everyone focus us progress. Automotive, milestones, you, for on our and near-term ability deliver XXXX continue Thank look and stakeholders. operator, with us of world. on us, our our forward for much long-term you of our to support would joining both and reaching And your in you both to updating firmly have and that in to in appreciated. to to believe progress say continue devoted the highly are to look beyond, fortunate we power I I Co-founders team know, forward our as today. future. We and

Operator

conference. This today's concludes

You may for participation. disconnect great your your lines at a Have this day. time. Thank you