Earnings call transcript Q1 2023

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Operator

Good day, and thank you for standing by. Welcome to the REE Automotive First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be question and answer session. [Operator Instructions] Please be advised today's conference is being recorded.

hand Vice over President to today, your like Hamid, Kamal of now the to conference speaker I'd Investor Relations. ahead. go Please

Kamal Hamid

Thank press at release investors.ree.auto. all you shareholder letter XXXX hope and this our and you operator, morning earlier that our quarter We conference for seen have issued first call. you, joining thank

joined Officer, to Today, and Barel, Daniel the Zaltsman; CEO, our he Q&A, Business Miller; from up where before Officer, Financial Officer. letter and our opening will shareholder our will our Chief Josh be Co-Founder Yaron Chief the be call Chief sharing Tali highlights Operating Tech,

statements. I Any note actual company's that may statements reasons, would today's for that strategies, by be you beliefs, results which statements. of different variety our statements forward-looking many forward-looking plans, beyond goals, forward-looking include and of Please like describing are forecasts remind a control. expectations, such the call other to anticipated from projections, may are our assumptions

Form required March the risks refer filed Exchange could statements, publicly uncertainties which assume update identifies obligation and results. no XX, Securities as the any We affect XX-F and that future Please except XXXX, and business, principal with by to prospects law. Commission, to company's our forward-looking on

most for be letter addition, comparable a loss today, GAAP including reconciliation and certain these In non-GAAP directly will discussing shareholder non-GAAP of we measures net see measures. Please non-GAAP providing or financial the to our measures operating non-GAAP expenses.

to At this will call point, I the Daniel. turn over

Daniel Barel

letter this at us seen press that have everybody, Hello, our earlier today. for and morning shareholder I and Kamal. thank hope joining Thanks, you investors.ree.auto. release you issued

additional on we topic on that call will as you it encourage If you the I haven't to today. information this discuss has review yet, it

Automotive. that share REE pleased to I'm for XXXX has great off start a gotten to

showcase challenges several dealers, where influential ACT their opportunities key to quarter at proposition. Week were first us unique afforded we understand with value fleets REE's Work like Expo, and and Truck Our events able exciting and interact

team in also able achieve important REE our to winter the testing another milestones Sweden, step the getting was on like our road. on to Our considerable vehicles completion of journey

a of by focus we half initial and second Our make continue with end delivery the pilot progress to path by on the XXXX, vehicle of here. to certification remains XXXX great

in of are run level found end be unit gross growth. low on breakeven plan XXXX. will the through a production shareholder production on We working expected vehicles targeting a to that is us low production vehicles X-phase Phase of by X-phase to letter. and end our the the in allow anticipates targets the on achieve with mid-thousands by breakeven margin More can X, X production the XXXX, to which Phase EBITDA sustainable assembly pilot in plan year of XXXX. hundreds, our details of

our As recently X the product PX-C you to near-term may and and the the the stripped further and program. the announced PX-S, lineup chassis, we introduction focus our Class the incentivized fast-growing cab, joins existing our X box PX-C X highly market emission PX-B, chassis of on seen, targets vehicles. EV The X and PX Class in have which complements emphasizes truck,

Columbia emission commercial benefits market. signed the the the Fleet fleet U.S., be recently for to MOU by We is pursue targets driven states District and Advanced by expand to ACF to California X ambitious adopted EV vehicles sets XX significant X for emission Class demand which Clean expect the trucks. X X of further commercial the to expected ACF, of throughout the reach and the driving The XXXX regulation,

which orders U.S., dealer customers. which in X X are Together, order dealers initial book. already by our growth the the included PX network approximately our in in fleet have program these vehicles, XXX dealers placed the proven Interest includes increased current now as of and of

From investments million a and no comprised $XXX cash, of quarter debt. liquidity cash short-term perspective, equivalents we financial and ended with of the

testing end XX to for the internal initial expect selected deliveries including $XX year We and with financing million of customers. for vehicles liquidity, the

generate based breakeven network on production additional orders before requirements. to mid-thousands sufficient this growing customers. will working ramp due to produced up understand to fleet mainly to we expect the and capital ramp-up We vehicles serious dealer of low We to that the funding our reach require EBITDA

explore will debt form, all this equity raising that in estimate or the our million line million. to business And will cycle in with ramp-up require $XXX We option need. progress and $XX of we right of the

more year color progress of provide this our will model on with the later our We plan.

for it of shareholder take I talks to, this the all shared of highlights a up these letter detail. we which look remind Before we to at more which want in all, first open morning, questions, you to

You can it investor at our access website investors.ree.auto. on

dedication, achieved opportunity already in have to I have more the thank this particularly updates. the hard forward across we would continued they their for take this the I also look to and milestone sharing together and like accomplished the future of team for work work globe year. great REE

open please call the for Operator, up questions.

Operator

line D.A. Davidson. [Operator go Instructions] Mike First Shlisky question Please ahead. from is of from the

Mike Shlisky

you because money just you you lot make would REE? heavier orders a go do operation to for make was as guess -- just to have guess I'd start kind Or orders I would you debt equity. way have raise you're some things keep to expect the curious, wondering, weighing ramp raise before capital sharing last I to comment easier your the more to any that do I of about need for wanted there before your be going up. production? quickly it ask you guess first that potentially I get before capital production I the

Yaron Zaltsman

It's Yaron here.

achieve early can make our we we because equity So think debt us, it both for probably have decision to about know do will also too raising goals we to be sure what and to I access basically So a even right? quite of speaking, here. we first, are that today

it can on for then do now, for it's early We'll is months, too are But or if decision. if time make we explore based it equity call direct that over to the make a going we us it's and coming debt. to what

Mike Shlisky

question. just quick And a product

You testing, be over left to up from anyone a winter and do ensure purchase for Or is is on? drive? ramp that to REE Is going do? point Sweden. mentioned road-ready was to vehicle and and in that anything has left to from I what point, to that guess major there sales it a that

Daniel Barel

one? Josh, want this to do you take

Joshua Tech

problem. I'll sure, No that. Yes, take

calibration. So for completing winter this -- test activity. on on yes, will we I is year, for we're what still certification this track to the plan a milestone doing we base continue But mean, was year,

building the QX. for all will and that us of be year. will our homologation to for we by those allow activities ready vehicles homologated the certified end So related be And complete to

we see not don't we there -- any at roadblocks So the do moment.

Mike Shlisky

And that's them? all X of PX one products or major

Joshua Tech

for the the van. stripped course, of classified chassis the That's PX-B, correct. and the PX-C that's No, walk-in

Mike Shlisky

this one could in And waiting start then curious ahead point. be at the Coventry one's order me. have the of one both to and large of sort the that just readiness you Austin? to Can maybe last I'm to for It or produce other update of building? U.S. on us also status if the way

Joshua Tech

Yes.

initially be, plan production in what of is that's across build hundreds. to we'll do So S. from we course. plan 'XX, U. said, And as mean, -- intentional, the going and we the I that low And XXXX during do then production expected the to board. Coventry, we capacity to -- we're out

Operator

line the Please from Wells go is from This Langan of Colin Fargo. ahead.

Colin Langan

$XX What's the you PX. Great. now cash to changed sort to in million of in about Last quarter, to launch million enough few raise capital? that months need $XXX had you the last talked you

Yaron Zaltsman

It's Yaron here again.

in nothing we our the $XX are year for if million going So X quarters, quarter. of NRE. the still to changed, need is look the you right? of because to projection spend end actually, the per coming Part So we basically, it in at roughly invest

and because question getting customer. us, time afterwards also ramp up, work going are capital there's what's money order the between are we X we going going the The time are because to the the years ramp vehicles. always a it's paying -- always for to a have that gap The issue in first the are XX how to time from up. question working to we like coming is is to in And we

it's to So money. plan that, raise the for

to working million we to issue, have $XX So I think to coming probably if another X in based $XXX not answer X years, we and to was the no working there make capital enough need a would be that don't issue our step million. raise need sure capital current But capital on the -- have we little here to any next the that to bit for years. take plan

Colin Langan

to need your question, but obvious And opinion just saying maybe does capital. it's because accounting you're you affect this an raise

does I that there Or those flag. it's an -- out, could they expect? it audit it's affect is think so capital? just what know be you since opinion your issue raise to sometimes to that of -- so far is liquidity Will need going this one not things we to be

Joshua Tech

mentioning repeat question the $XXX you are why question is So Can we the to million $XX again? million?

Colin Langan

refer believe, -- It's sometimes your they financial? this affect to the capital, year. it it if Does but going to sounds raise next auditor's concern, what it a as maybe need accounting it's you is like I like your opinion of

be So issue. would that an

Yaron Zaltsman

Yes.

a any again, our going we to you we now, in not it for on So have So need But quarterly basis, going-concern issue. right? did have any explore see now, for don't we concern report. paragraph

Colin Langan

I was getting at. That's what

remember have a just should those about new had think to lastly, Because cadence coming I in? those going the XX Are think orders potentially we events last the coming new event the in from And How about of should here? How orders? drive you year, I July. in? then Are think orders you we so still big Okay. now.

Tali Miller

speaking. Tali is This

growing our So with can do a and significant believe see that -- we dealer to dealers. base We're market network we from to it's customer with electrification. prioritizing existing growing, are potential to significant. build continue very of the authorized the order with share, how is to our expect selected book committed we that carefully growing those say constantly especially respect those I And and that pipeline customers'

Colin Langan

Okay.

Tali Miller

Yes. year annually. over don't of indicative held maybe a the sales And formal of the per with have dealers, magnitude actually, billion can that we with $X that, our conversations vehicles although complete to generating and XX,XXX I tell you number,

Operator

line our is the now next from from We'll Cowen. question. TD Jeff Osborne take of This

Jeff Osborne

Phase an questions Is all my XXXX final X progressing? assembly was curious on X. update how can A give couple be you for produced of to and us Phase expected Or the I on is end. on Austin the Coventry? of X in

Joshua Tech

out build we're I set U.K. mean, logical deliveries the This as going we to focus either there. over a At is structure the And make as from up to way, take that vehicles go -- -- we and those again, at we're moment, one. ensure have our that to everything let's we the I'll the 'XX, Josh. infrastructure right either U.S. needed. breakpoint. time we'll the going make customers But when decision the get that we're on we way,

Jeff Osborne

X as Phase the would a of Austin? angles I be And that would into get was location? that be thousands, you done partner's then, had? one in at Josh, the done Or thought that you

Joshua Tech

in always the our Keep approach vehicle the to is CapEx-light yes. other is partners. besides is main ourselves from differentiating mind, mean, are part approach. obviously, how always the factors, of approach It's right, with the build we corner, I our

Jeff Osborne

QX at -- year? the what then for what remaining burn. the can $XX on just the the similar that of rest your for million the you of be you the you And capital-light mentioned touch the approach Should have? is CapEx And is to R&D levels remaining

Yaron Zaltsman

quarter R&D, that $XX R&D than year, but until million per the already lower this now. we heavy roughly course, is, included So have of

we year, reports. to in R&D investments already the place because have major still of But Next been other course, have want we an taking opportunities. R&D explore our

Jeff Osborne

question unfair because DOE but loan Microvast, just yesterday, was received an partner, news battery from the I that was pulled. think be Might the the your

domestic them And And at so that might I was involve if risk? plan have or be a with you backup contract do your manufacturing so? just relationship curious, does

Daniel Barel

Daniel. It's Yes.

just lot any we to it of -- don't this still or There's discussions we to the deliveries. see happened that yesterday. to point Currently, be chain supply made. a think I at the risk

Jeff Osborne

dealers are safe But battery? none don't understanding the that credits, that? Is my as for you as well a need potential customers or American-made of an expecting assumption your

Daniel Barel

Yes.

to the the I the should which test hundreds follow-up the of low XXXX, low in which short few term between the are is deployment. -- as of think the mid-thousands of you XXXX, of leads differentiate ramp-up to

naturally. test sourcing So fleets, flexibility for there the terms more are in and of design

close very Remember, customer the us. we keep of the to voice

customers, calls, to to teams would as fleets to are evaluate and So we them deploying vehicle we once explore test previous together work with They better. the will to want them they and can we expect to side that deliver with you the product earlier it. side be, said test together by the in customers help

account also, of question, your naturally, would tell. to the said voice early So we customer. to I the take into it's as But too

Operator

[Operator Instructions] no There time. this questions through coming are further at

So I will the to speakers. hand back

Kamal Hamid

and us to questions any speak if follow-up Thank feel Thanks free reach would you you all joining have like out today, with again. for or management. to

Operator

Thank you. may participating, conference by. today's stand does now for This please conclude you disconnect. Thank you Speakers, call. and

REE Automotive (REE) 23 May 232023 Q1 Earnings call transcript