REE - Earnings call transcript Q4 2023

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Operator

Good day, and thank you for standing by. Welcome to the REE Automotive Fourth Quarter 2023 Full Year Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded.

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

Kamal Hamid

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

for the expectations, review If I Any statements. may insights the remind risks Exchange by no We call. I uncertainties projections, our we you March control, and topics the the such refer that a include you identifies are to plans, today's it talk actual that could to which on the forecasts results. Please XX, statements, like Securities assumptions encourage to obligation reasons, as Form into about describing haven't, will in which would beliefs, beyond has it of publicly by you forward-looking that forward-looking XX-F and our additional statements filed as be strategies, future Israel. Please statements. assume to may forward-looking XXXX, call such prospects company's variety and with any are except note today, our anticipated different Commission, ongoing and company's of results many goals, from principal as business affect statements military law. forward-looking update conflict required today's

will over most to including hand and to now shareholder we letter measures a GAAP discussing non-GAAP addition, for call operating non-GAAP be non-GAAP Please comparable our today, certain the our see Daniel In of measures. I CEO net or the non-GAAP financial measures providing Co-Founder. expenses. loss and directly reconciliation Barel, will these

Daniel Barel

a REE. with derisked while lifting go-forward unbound original design was trucks the milestones today. thinking. with line commercial by time line a to of to to all path electrification all you thank We for our Kamal, of Thanks, clean heavy us commercialization the joining sheet happy and that approach. the I'm path, true vision a in through behind solidify XXXX and pivotal key us is to for our achieved report white-label keeping much and expedite our on year and legacy

technology by-wire in FMVSS compared electric space certified say proud medium-duty ICE to to the of by offering. state-of-the-art we commercial and the full by-wire Our I'm orders vehicle, vehicle to other have is allowing world's advance created the mature. us first full that EVs magnitude

our We continue boundaries year second to consecutive conducted extreme vehicle and winter under push successfully testing the operations, testing of having dynamics product conditions. of weather our

progress on We side. the have significant also made business

our now book see, the demand state $XX PX-C million, With for Canada. in $XXX,XXX certification over incentives order and continues U.S. customers our and sales to EPA, and vehicle. U.S. expand XX and more to exceeds the grew dealer strong federal the year-over-year service and eligible of are With per by CARB XXX% value of network and we our than points

driven the delivered one been was dealers vehicle our largest has of Knapheide off in line and to vehicle country. first upfitted with the Our body and commercial

and plan With this business advance the fleet PX underway, remaining production our completed later to more to we plan lineup. while focused the on demo customer towards and year first deliveries scale our

bank and our Alongside with year burn ended decrease million a disciplined remain tooling credit cash, significant with $XX million year-over-year with in for facility. We the REEcorners we a financially cash XX% progress, deployed. investments, the in investment equivalents including $XX cash short-term

low we effort first us, trust. and in trucks. hundreds of a M&G, in support thank led the them $XX working With our continue to has and behind necessary raises advance Confident successful of new investors, phase secure our our of capital need million alongside bright future, shareholder, for total existing those ongoing for X for REE's capital I production their of and largest institutional

production the raise working remaining the with remain our tooling As production decided until we and by production current U.S. scale to postpone build efficiency. exceed order with conditions, we remaining midyear for by ensures aligning plans completing in committed temporarily capital our target against investment the plan. We strategy up do required as available the to disciplined additional orders for orders we tooling for capital market we flow not in inventory. greater we investment production and This capital not

was instability. XXXX have together significant achieved we REE for pivotal because a facing what many year because we us geopolitical and despite it have of of accomplished

at we'll I Operator? up that, proud of open call of team am For people that, the each for our so questions. very great REE. With

Operator

from line will We the Davidson Instructions] first question Michael & our Shlisky D.A. Co. take And of question. comes from [Operator your first

Michael Shlisky

you schedule, ask before? in you I put maybe suppliers same some et had And of that change tooling first any wanted are they I if sure contractual will them, or to make about kind do investments. what tools, be tools, be them must dates, the pay you to folks want to there, the people of of any of payment tools who the line just having I kind cetera. these selling you you other when I get to exact you guess, guess need the have are back first, the there the who changes

So push sure the you for you date. that though need back even time I to them that just have it, ready to at you'll make exact that get still, when are want you them

Daniel Barel

why and from first morning. is foremost, you don't And I'll This Yes, there? Josh, Daniel. course, and of start sure. continue good

Josh Tech

Michael, Okay. to again. talk good you to

answer fourth our your the so tooling targeting place still in we're to to by question, have quarter. yes, So

and in doing, U.S., our CM in previously progressing the the stages our final we're So with nominate what to we're okay? manufacturing it's and X-phase shared the approach, investment, to we're related so

doing, is already approximately corners to of And raising we're midyear, has targeting capital remaining the been and investment tooling for then complete the million the the in what our deployed. by plan. with So $XX sync we're this

us So this by production XXXX. to with allow contract U.S. manufacturer of the in scale our will still end

Daniel Barel

Does this answer your question?

Michael Shlisky

Have get though the when tools your when you need indicated that -- that ready Well, confidence are? Or suppliers still are okay, even them, that you'll they date. so just changed to want there's doesn't are you the make I you sure change? you've

Josh Tech

naturally work We together them. with Yes.

surprises. no So

Michael Shlisky

months. of also big to touch of be to other that give in the of Truck PX I I'd shows. sense a some place trade recent on just trade curious take want of few had half a Then maybe the that have that fleets there that large more and some of dozen taken couple Work out regional last could a went. platform, the Perfect. or Okay. us as a show. shows how there's a the are There's dozen them We results

levels you new necessarily have are? from you slide, should from we about come in higher roster these any know be orders? like of you a names, you to just Did to, backlog curious and add shows certain have these out could a here, new any if you with who but when customers anybody did you're dealers the fleets, on thinking do major new reveal I get allowed

Daniel Barel

shows a have those very Yes, lot very And and very, busy been seen demand very a and us. for had we've of booth strong there meetings. successful positive

seen us the those do -- vehicle, exactly them. to out as as that fleet the from to Regarding approved think the to allow that, have the you to to those give to it's the them lineup an try and that living strong PX to our fleets from is demo fleets the those supplier ability fact interest nominate confidence I designed important well. And program recognize -- mentioned, we

I'll So for maybe the to up other discussion I question, And think opportunities Business let dealers. continue. and your in yes, with interesting come of short, we show, with Officer, Chief the fleets answer have very new that many Tali,

Tali Miller

Good Yes. morning.

and high So first of demand interest. strong all, very yes, a

We also in shared orders committed growth this for quarter. year the end the of or

and the vehicles in in delivery this the into this, to through we initiated So have low translated volumes. of orders. addition demo the But program,

fleets to We already those are additional in demo events fleets. we units into convert from expect orders those interest saw. that the going scale trying to this see they And following showed

we've are Jose the to City Franz San -- going Specifically, to for leading example, Bakery, include, the of others. to and demonstrate Canteen, vehicles fleets demonstrated multiple we

Michael Shlisky

there, I'll guys. Okay. the leave it best. All

Daniel Barel

Thank you.

Operator

our next will We question. take

Jeff TD Your from Osborne line from Cowen. next comes question of the

Jeffrey Osborne

curious us $XX perspective Is book, how it was great see, that half? to than is more I that's exposed million the a Daniel, much of there? California? give you on just order to Can

Daniel Barel

a not U.S. linked is me for unlocks strong the answer the not our top think states mainly I'm CARB let I to gives that into great our or we that very but question. California our have But around a of in general, in more support us it the of CARB, look $XXX,XXX mind other That's recent aspect. per here, also California question, certification, orders sure across bureau recently incentives majority truck to your morning. We the the I numbers, demand Good announced linking that adopt in California in tailwind to but than California customers. right? CARB the that see to incentives, certification, air

with customers of basically our numbers worked more it. this as Tali, and you both we I so. hard for very of to said is truck XX% state So I many... now course, in of California calls, us. And incentives. great. and the important have do earlier cost see is on And And is think federal covered CARB We is, the do California leading earlier, through how than having think CARB, dealers

Tali Miller

it's from X/X. Specifically approximately California,

Jeffrey Osborne

quarter of sell. you XQ would you Texas permits. mentioned and How giving exiting we then the move Got many the then of I a and in how running, about slope sort and you just expect so about it. the production? XQ into of produce sort XQ, you more capital should through XXXX? think But in production Texas bit to trying cadence guidance the year. loaded spring, ground front-end a not speak, you're know on is a units of how to from And understand of maybe hit -- the think official Coventry transitional and it to to should Is bit XQ we adding as capacity as then

Daniel Barel

question. Josh? No, that's a great really

Josh Tech

Yes, put color. I'll some

don't So question a maybe of and REEcorners like the how tooling deployed, the many in early for shareholder, for said year, those little and in being we U.K. we the a we don't deliver. are this the too which to to. need like answer the -- continue said, build we to it's as the want said I to will But we'll over-invest little it's We investments

the then to again, tooling hundreds U.S. remaining we there. us plenty low of for vehicle not too to the completing again, -- have the And production to spend we'll we 'XX. needs, capital of scale vehicles soon. online up the the is bring the linked and end working capacity We're the rest So up by right? going the of But in plan the

are together. want we tied So to sure perfectly make things

Daniel Barel

Yes.

to started continue and dealer strategic we've to a right, will others the see from in at trucks delivered do delivering got program this on we Jeff, year, the quantities earlier which customers vehicles already people demo basically, full Indianapolis, of are one NTEA, few way. this our So we the to to U.K. to as year,

And the and approach U.K. contract then, from to the move production the reason the our the the we're reason production using for and the up continue -- us tooling reason for dealers provide assembly of course, this corners the doing comes we'll we're and once a manufacturer the right? dealers through online with flywheel U.S. full But is and and running, effect, the is that program with that sorry, demo

large and service area. relations geographic with have a dealers in multiple their and long-standing fleets charter These footprint

fleets. will relationships Some multiple are decades be each of we deliver right? demonstrated to those And vehicle old,

Now we that follow-on believe those scale to this and orders. others fleets our result speaking will in dealers to and

online is for that the started process this year, amount in not start early producing vehicles of out and later the will serial have we until early idea waiting to the that online. be production we this the process U.K. come to want comes strategic of So we or

Jeffrey Osborne

think out laid demand ones brief you the we comments then any about Makes I the the XXXX? charging so readiness meet expense rate, the that about not exiting quarterly X same of squeeze expenses, that CapEx, the and Daniel, if but on your sense. should level throughout current quick just could could If in operating make to here. stay XXXX? the as partners into financing XXXX and the you've Should And

Daniel Barel

Yaron, you it. Yes. Maybe we'll bit. take start first with financial should the

Yaron Zaltsman

sure. morning. Yes, Good

where to in in have our we year I going to are our forward it's roughly our burn think path the What XX% year this another decrease operational I cost roughly keep in by XXXX. And in of XXXX. started XX% we should we decrease costs. continue is in we'll year to also decreased compared cost. So In XXXX planning year that think decreasing actually going XXXX, seeing for year rate also. XXXX, should And we process forward, in on do our continue including year XXXX

Jeffrey Osborne

and the with That's a combined. the burn CapEx OpEx

Yaron Zaltsman

Yes, is correct. correct. that That is

million not of roughly thinking tooling $X to month more half the down rate as I same it So per be quarters. then need spend expenses. average. second the dramatically. we're over think will we the HX, on to in splitted $X Because in about year, the go million NRE the probably And and It will going to complete we'll

Jeffrey Osborne

the Any it. Got you charging have, thoughts brief financing on and Daniel? partners

Daniel Barel

Yes.

on charging is, interesting large-scale, compelling one working that front, Power, have commercial-grade So of partners, charging we're Hitachi very infrastructure. the and which course, several charging Hitachi, offering with very of of

for to local look other we that they've at. recently, with And because asking announced more solutions, some others think I something around are Penske, work is solutions. which with interesting

able design the for super work chassis body we it's REE. the mean, of for of that other and you'll because upfitters them, was X Knapheide And with. days, work important, I Knapheide. a course, within than course, mentioning the with record ease process, of the upfit, how also And we're marriage of with showed complete right? very to happy, which that is the of less we the we see on

know vehicle. we when sure they for sure inventory. for receive we here, build upfit order, The we that build the ready, infrastructure, a customer, ready, to ready we building the one the Therefore, thing start to make may chargers be is the have important Jeff, make we don't that everything to

with to us us they trucks, need all directly only order. everything so of continue building very inventory, that not advance delivering we for for because in goes be we or make to that our pickups. of stuck don't will for we And this we're I And get therefore, inventory partners, and is postponed have truck service. prudent on key they into the We and arrives with the complete sure approach. think deliver And

Operator

our take [Operator Instructions] We will next question.

the Your of MKM. comes from next question ROTH from Irwin Craig line

Craig Irwin

Can orders book? first is building strengths how could dealers followed head of and continued with sort should you have this be we on approximate count, the follow-on talk fleets of I the that please number the that the order you you? And talk maybe is the about placed congratulations say, out. What of units be about from orders? by individual there, versus a upfront guess, have sort I I would Do the that, couple how question. follow-on, could potentially of delivered? of And fleets one much guess, unit if of

Daniel Barel

Yes. Good morning. Good early morning.

have our first network So in and current country. by-wire, one and for we see largest we now demand covers for the of the technology, currently think and XX our I EVs strong points your REE the question, by sales our service, for -- for of dealer for

we passenger the gives XX think through U.S. And whole across very the this both And us Canada. Maybe do U.S. we see interesting I is you demand of terms parts deploy that. broad what Tali, in you footprint Canada. segment. of And because color demand dealers, add market in that in and and a it's passenger how on vehicles more commercial that the and in can different than

Tali Miller

morning. for Yes, And question. a this sure. you It's strong Good question. thank

is to and So Daniel's -- very this U.S. point, on to which XX for, service us having this across importance are first for fleets the of what points receive achieve. the looking is service was allows to and add Canada, fleets important

We actually demand, what for this reasons. continuous X several to in currently demand growing we several space -- respect we a EV, to the on serve. driven EV slowdown of Second, is demand -- do by the think see space this the see see believe we Class passenger reasons the the with is we unlike in demand I X the and mid-duty that

the mandate are strong. goals for electric Of advantages course, important strong and vehicles. and fleet. very federal emission the state, they of And ICE zero very versus very of course, incentives, are both vehicles TCO The

perspective, also the infrastructure actually, space with, on complex a cycle passenger we and the from that fleets the the of say driving would the at, cycle, I moreover, feedback midsize is we vehicle, are might work And be a short. charging the the which one duty

and basically, day the the start driver morning So depot. end at the the would at the in charge of and

charging for is the to from So infrastructure served. them be easier

Daniel Barel

last yes, to out And approach your your to is the think I point, roll to correct. how fleet

to to on we ramp low will towards the are later ramp XXXX up ramping trucks fleet of mid starting We up and then thousands year. the through few we And providing when vehicles a up in production. to start every then it

which demo customer, attuned listen on think vehicles although to to for I to they been very still time. changes few to are want, them receive the we've with deploy important modification of program, it's long a a any the together those we very voice the run and very, developing

you high but customer. this why of satisfaction see remain the the So always we voice there, level is the to attuned of

possible would vehicles like fleets towards with them up explore we months, So XXXX. and many ramping to to as then vehicles coming them in providing the our as

Craig Irwin

Understood.

had meet commercial your delivery So very took obviously vehicle big they actually, with vehicle commercial are here of with to them, Daniel, we recently an the that too. customer got in tour the opportunity supporters. the U.S. your we first a to -- And And

a it lot of seemed generate to So excitement. quite

there? purchase this are for share What what early your maybe learning of learning maybe these are deliveries? early you're shifting these from us the you from with saying? investment What what out of you part Can on the are deliveries? understanding Is decisions customers and priorities customers

Daniel Barel

I agronomic think chance had to talk think floor, truck. because, the to low the for positive them. the foremost, and the of of our customer, what we cabin, hear overwhelmingly key design, point from And and And spaciousness I we're great and as learning an a It's the feedback first a customer. large for offer Yes. it's very the first driver-centric of deployment we mentioned, a to the that you we the from very cabin that advantage is, the performance to get

one. That's

lot our multiple Second, multiple of and the a cases modularity and offer with use flat due for work to like applications our upfitters to fleets low floor. to ability different approach

tests the second a the just they extensive for the to in example, we that all back mentioned point we for winter concluded row. the have year Another offering, is data that

is is for have minus is and guess what to like extreme XX range So which what don't in we just degrees, example, performance, saying. the the conditions, good,

And trucks the offering, behind ability able to leads I expectations, being that them showcase and that, our their our the and the and calculate them. transition think provide makes going for towards electrification it -- make to to of data TCO all to customers easier future easier

Last charges charging infrastructure is ensure as the partners support working they of not are that with closely we're but adequate to important. -- trucks. asked, have the And least, course, very previously to

Craig Irwin

Safety Excellent. FMVSS And question. partner? is this last question, FMVSS, gating certifications, certification Standard pretty with your How if it you achieve I take basic a Federal is is the Vehicle necessary for commercial may, did a Motor factor deliveries? that to actually long

is this logical take someone big similar with investors of amount a how a different technology? of the technology a was for is you today, understand such If little start a and to If help accomplishment. time them better FMVSS to a it bit significance or could competing

Daniel Barel

a mean course. huge accomplishment. it is of Yes, I

vehicles on Cybertruck, be and one a world fully like partially first put out that because and by-wire, are able in mainly certify were vehicle. some First are -- There we the road Tesla are foremost, to there still the by-wire the right? we the steer-by-wire, the to only

by-wire the control by-wire, because when see trying lifting more do to software to we full therefore, OEMs stability maturity and adopt do a heavy slowly it's redundancies and of more very critical. and and a is more by-wire, and especially you more technology And

like steering, and offer been see we players Tesla, that do there to others like the but only vehicle. more Lexus we around by-wire definitely, system are partially have So full a out more and that by-wire one able mainly

others the the learning by-wire people of sure in as it's we abilities not And and around the I'm us took and and that it's redundancies. algorithm years our years, with time software machine testing and just AI ensure hardware and mainly technology. to needed And the understand, validating all the run all running have to real it mainly, capabilities

way, mentioned, go critical to the we cert in to it one, EPA and run this decided it with those very And the you decided possible, the and as critical -- manner a a party in cert performance. you it we the put a to is validation but first And perfect take high we as is vehicle as right, and is a FMVSS U.S. by can't FMVSS to pursue that us to fairly helped one. believe a without market, because one, ensure ensure that the is being third process that correctly level of tests the

that I not phrase to Should try we sure industry, I being FMVSS, a they all anybody in opened And magnitude currently, I should. able mean, else do of gap everybody that. to it? trying. are the I'm mean should, everybody think do think else the with sort I But with in

trucks are it now that and corners been for collect to from keep And in we one But of allows of system, by-wire and XX on that the assume improve we've by-wire our more our the everybody should technology. by-wire as our And version road, our us more now. first the even working saw data on further. that mind years

far assume is So future. there coming the more one should in

Craig Irwin

my the Congratulations questions take offline. Excellent. I'll the on rest progress. of

Daniel Barel

you much. Thank so

Operator

be I to closing There for Barel questions. hand like Daniel seems further would remarks. to no to back

Daniel Barel

driving results. for support. strong us for everybody, team everybody and for want their to safe. say stay And everybody a you, REE time on our I Thank investors to taking the so I phenomenal want you So thank to for year, I again want and many challenges great today. thank thank overcoming joining and strong,

Operator

today's for This conference Thank participating. call. you concludes

disconnect. You may now

REE Automotive (REE) 27 Mar 242023 Q4 Earnings call transcript