REE - Earnings call transcript Q3 2024

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Operator

Good day, and thank you for standing by. Welcome to the REE Automotive Third Quarter 2024 Financial Results Conference Call.

[Operator Instructions]

Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Keren Shemesh, Chief Marketing Officer. ahead. go Please

Keren Shemesh

generate laws. of autonomous call including with by demand implied forward-looking December may with at and and course REE's Litigation Exchange and the in pave annual software-based the of management will way performance for other make Securities risks, Risk The that those the redundancy and time up in thereof. Daniel federal and Exchange Securities and will material discussed positions results Factors architecture, actual the call Act XX, from are size include, REE's implications elsewhere transformational uncertainties, During the this and leading statements with elsewhere wire subject hosted half autonomy. Such year and limited in of to to it to Today's are breakeven, those Form potential uncertainties REE's Co-Founder report not of operational is forward-looking commission this Its CEO. subsequent by bill book It's a Barel, philosophy the it products deliver and statements in XX-F to order and to, ramps securities second revenues. forward-looking U.S. other and for XXXX XXXX, production course Commission. and filings known it and improves regarding differ risks res Securities the during and other of of for forward within position their first its is express factors that to that involve section the for planned statements experienced North the projected. unknown and of the filed target ended or materially trucks successfully year but those growing the production cause next BOM, statements statements programs full it and The call, These of this efficiencies for the increase Reform in American reaching technology. Private and customers timing as

by Chief Aviv, We I Tali Business Officer. Daniel Officer; will turn will Chief new to Hai our Officer; call now Josh Chief be Operational Financial and Miller, Barel. over Tech, our joined our the

Daniel Barel

thank Welcome, everyone, joining and today. for you us

the We our with report by supported for production along partner, our backed are line is pleased from to Motherson accelerating XXXX technology another board truck. production of demand across quarter flagship yet strategic is start milestone strong and with and QX and of fleets is This by PX improved in reproduct liquidity almost OEMs and a top-tier to strong our value liquidity from quarter, $XX to while million fiscally commercial strong to continued devotion in results than our banks. and delivering more reservation manner. our a X testament improving million confidence by disciplined XX% from Having is the doubled $XXX

in, Before it are dive share I the REE. would affects what we like and how seeing we market in to

EV solutions ownership. they production towards scalable total they have advantages an offering for We critical that and seeing capable more attractive of challenges solving cost are shift mature operational fleets technological reserving needs, addressing charging believe of significant significant capacity their as while and more

lineup enabled firsthand benefits to by program the of technology. PX demo successful fleets Our experience a x-by-wire and

to better technologically by offer able and vehicles services. software to offering -- customers support feel advanced software-defined between software-defined to being vehicles, Now market their with expedite confident more their we're tolerate allow pioneers, technology Chinese the our fierce auto more seeing Motherson new and competition we future those with OEMs collaboration with SDV, Amidst collaborating protect fleets OEMs, looking vehicle and regain transition growing with these performance to lucrative more ownership architectures legacy our legacy believe demand. underway, manufacturers in to automakers ability while share

REE's and technology, current across SDV into product while philosophy compete can multiple their line they of OEMs not integrate leading legacy future our allows access vehicle to complete, categories.

with We and are interested and seeing Software growing x-by-wire interest our technology driver for REE's the some STG offering. path revenue to in as generate technology believe corner REE rig will evaluating actively that margins OEMs from commercial our I are a and have evaluating Service renewed autonomy pave a driving. software-related shortage this term. an vehicle fleets a compelling In solution is from the in for we autonomous market and improve evolution witnessed operators. mid- is years, and The on via recent long focus also suffering automotive severe and

and safe, operators autonomous fleets support driving. However, mature a and reliable to architecture vehicle lack

Our leading full We with for Airbus, experience as technology safety self-driving for believe this standards growing REE's transformational in technology high leader us leading our underscores with position a performance. as successful AD x-by-wire a such from at time AD programs partners. interest and

vehicles am very side, reached for On PX I having proud of the on very, the time. production operational our Team start of REE officially

REE the to technology, of to by business Hai in half and of to important second and the target financials. vehicles. This of in with Josh? sufficient business will We advanced gives first powered an course, stronger meet. ever face year. commercial we operations, breakeven a of be XXXX goal few we is for of allow stand strong over on for REE secured the our vehicle for and in space auto material to to vehicles in our rarely in Tali us is production our product track on technology than firming for believe quarter, the best we achieved America We offering our With production with the we plan. today model growing capital underway hundred Josh demand industry, had business and in the turning selling and bill are confidence half start as deliver I'll This execute next believe that, a North the ready what us call

Josh Tech

the PX production trucks remain of share PX first has our Thanks, Daniel. to North We commenced. American the deliver entire anticipated On our first half the track REE behalf happy team, highly to to XXXX. customers of in the trucks of I'm on

to hand-in-hand implement proprietary Meanwhile, our the at corner and revolutionary to infrastructure team integration manufacturing Kingdom. of production and REE our is continue cross-functional Roush center Our necessary support we Coventry comprising United in REE, our working ramp. the Motherson

past has Our over the seamless been work few and smooth, well. Motherson months with is progressing

approach. key and within We hoses, in management our plastics. supporting approach growth on manufacturing their are fluid demand, taking has harnesses wire our rational our smart we in responsible the confident competencies are production and core to transfer manufacturing focusing supply our and market's commodities and to produce as started approach scaling success managing long-term such plan measured chain Motherson a and

that we supply to months material expect as upcoming this grow optimize will to increase We the the continue chain margins. over

will terms, payment commitments. We with Motherson are working also capital help improving our improve on us working supplier which

of improves All needs. to our capacity deliver this time [indiscernible] customer meeting on quality, and

for is with production to marketing eager slots our working closely team and secure sales production Our customers.

addition public to PX expanding not customers deliver we prepare Last least, in across capabilities We're America, continue our North to train to charging own customers. begin available the in to customers support their also on we able and of As and trucks our of prepare all maintenance are next to to fleets number the are maintenance. that locations to to Depot solutions charging year, dealers our first do be but available half we North to in training America.

over call the turn I'll Tali. to Now

Tali Miller

Thanks, Josh.

grow representing different The be and from XX of As PX quarter-over-quarter continues million, EVs several reaching Daniel fleets demand mentioned, America. increased from OEMs. would trucks reservations customers XXX over than our years by delivered to PX number XXX% for $XXX more North across that

use and creating trucks. have as We the and the diverse vehicle versatility, feedback There excitement our of are tremendous our customer States, we has proud maneuverability of and configurations design from our program performed cases. across multiple is demo received our base customers United

The PX be to markets. is the of flexible, catering diverse build needs multiple

delivery We delivery, from have luxury and applications mile buses. interest shallow my ranging last RVs to seen from admin

XBAR is formula ] and the and have winning commercial state-of-the-art software, when we technology combined modularity REE [ clearly the of a of for with and beyond. the our adaptability corners EVs Our

EVs to one largest comprehensive Additionally, and XX network from North pure across to America's provide support start commercial sales service points. set our is finish service for of

we units fleet first off are allocate to customers we beginning that are have thrilled XXXX. the kicked and of Our production,

reservations receiving philosophy the as compete and this We driving to surge is large from fleets risk complete, of PX program matures not production are interest.

Those following significant makes every OEM, technology, million have a recourse nearly major the in is industry investment software-defined which closely, seen strength.

are these to global that vehicle partially lines. automotive due globally We green share. the conditions manufacturers the are with who progressing market believe and Conversations their are discussions faster realization is product vehicle automakers are in this software-defined active industry anticipated. affecting protect the than the We integrating several with technology solution in vehicles macroeconomic interested into previously to software-defined

XXXX, software XXXX. for and Stanley of to XX% X% from up Morgan in just defined, production auto by As reported expected are by vehicles increase [indiscernible]

revenue increasingly with I'd REE for This Hai. worldwide offer. shift as technologies technological like the towards And software-defined vehicles offer new opportunities introduce rely we to automakers and new that, CFO, that innovations proprietary our on will

Hai Aviv

cycles and Since everyone. see learning in impressive team and milestones. and and Tali, to business to curve key I've investors goals. you, this I'm forward has be to from the a through look all rapid, I achieved hello, today. addressing company's thrilled Thank with before, at our moment especially REE questions navigated been pivotal management how It's is this analysts

costs as in closely with and more we Roush The hope production high to Motherson share mentioned, to our Josh demand. As we working increase point the are future. at optimize and numbers to we are encouraging, this meet information

has to a the and plan. REE our strong required liquidity Importantly, business balance sheet execute

needs support through to credit XX We working we credit capital needs. top-tier currently secure are as X to facilities banks production our facilities financing million from our [indiscernible]

our in we grows, those expand demand will growing looking to be demand. order to support lines As

to offering the will end REE's a model, and quarter, financing. $XX.X automotive-focused ability bank $XX to facilities $XX commercial a in flexible Q-over-Q. liquidity REE a the $XX Subsequent from total million. XX% balance includes and liquidity back with to lead an M&G, Motherson freeing deliver. for by third working expansion The contributing business to million and $XX.XX larger sheet increase in investor through QX, This $XX signed of the credit confidence credit facility includes Our totaled registered demand while up that million allow the demonstrates million on reflecting term REE's we take led This facility. reservation gross We additional direct also the million commercial of in remaining million end believe nondilutive credit proceeds at pure capital. financing long-term

tax P&L $XX.X credit by derivatives to noncash following from R&D XXXX driven in $XX.X $XX.X net in million remeasurement Q-over-Q R&D credit recognized an net loss in R&D derivatives review QX the in million were numbers. quarter. as noncash was QX, mainly by QX government increase well When net let's by previous was and loss excluding the $X.X U.K. The the Q-over-Q remeasurement as in the previous loss increase GAAP GAAP loss and the share million tax by price our recognized the XXXX. $XX.X Now in QX warrants XXXX. truly non-GAAP The million and was quarter. net and In GAAP of million compared warrants increase REE's impacted credit, $X.X U.K. U.K. to QX million Q-over-Q in from compared $XX.X million an tax government narrowed

in GAAP Excluding press statement by $X.X been in the Reconciliation including earnings tables release. to tax provided have of financial decreased non-GAAP net the QX measures to credit, million loss non-GAAP R&D our XXXX. compared the

and related burn R&D comments going now of program. for flow efficiencies of back cash Daniel continue to I'll a free decrease year-over-year turn narrow Q&A. continued Financial before to the operational to over phase Our with XX% PX closing it substantial to his completion

Daniel Barel

very we start quarter really It's another great production. strong from demand have back. milestones improved you which accelerating achieved Hai. to to the you, and during We Thank liquidity major of had

revenue getting and autonomous meaningful we and software-based a to see are path closer driving generating programs. We OEMs towards revenue, from

quarters. it have up thank want the and I dedication. team devotion Q&A, past their Together, to entire accomplished opening so few Before the to during we for much

that that, resources corner, lead start like continue to chapter to We to operator, belief thank support us Finally, our the excited this feel who their we and Q&A. investors highly around are do, what providing I the in new enable we show XXXX, heading the the open With optimistic to With into please industry. long-term REE just in year. would the store. this new

Operator

[Operator Instructions]

it And line going Roth Part. Craig and of Irwin first comes question, for the Capital from now we're from the to

Craig Irwin

your $XXX That's is So the biggest this surprise morning in a reservations. million jump. big

I of obviously to guys there individual you last were know some demonstrations, from big in have been that orders some your X,XXX customers I and good as Talking release. about hard as working So you units. think the -- press said out this your seeing year, customers XXX talking orders, results there

in about more customers traction orders Can new few we've specific the Are names know this you And about? your maybe that getting incremental the customers in you point the maybe that booked are many last there months? here? are of getting talked than talk there Or capabilities how are at dealers others are contributed names? as to Approximately technology? the that already

Daniel Barel

course, Sure. for you and And Daniel. the morning This good thank of question. is

the And us. customers of agree I think it's Motherson with fitting and yes, , you part, we're see reservations. -- more mentioned, to announced are So it's a comfortable we secured is one, with in with our partnership this Roush big And that significant said you we one now surge things As is like with -- earlier, the said and very placing seeing. linked there what fact I [ I in think, reservations ]

Now than up -- was quarter. in is important mention -- also can more it's X done of and significant that to XXX scale

to looks about naturally, and in how additional including reservation talking to terms continue the some shared I know reservation up XX we're So among we've forward. different to orders forward. public we like, the speaking the domain, people in names your and about customers which see prospect very production in going believe of industry piling that those will leaders customers, we question, XX and as move of fleets, large already current more are capacity Currently, securing customers yes, and does customers we're

Craig Irwin

That's to hear. very good

how then and So Any second little you more good Motherson, to plans? maybe bill their optimization far half, contribution that's give manufacturing here? contributing their question, of So are can the as us that they've the second for chain they on bit segue -- your my detail doing into breakeven right? on your a a color work materials evaluation as supply of been

Daniel Barel

for I think answer. Josh? to it's Josh question a great

Josh Tech

question. Yes, so good a

so a supporting oversee Currently, chain team. the partnership. Motherson the a great work about Motherson XX% basically So getting REE already. through far, We've the in the between it's seamless integration been -- and supply they're our

great that's So making headway.

they're will are launch produce their Another that parallel [indiscernible] in key coming basically in part to in other the core is basically where competencies. commodities

and we into we mature that So things different are And transfer, those tooling as even we we as online harnesses, like production will these mentioned things. expect, fluid commodities. comes vehicle, then those plastics, types further and grow of increase the

will The on basically especially is They're other capital on big to work grow one working terms. we optimize volume, payment as working us, to us that payment terms the the allow model. to

many facets Motherson so with the far. there So relationship

Craig Irwin

number if tempo 'XX production? last in we in a ramping in good when think the flow months. making may. news been progress question, you're you of should invest that maybe about throughout $XX Cash cash at free we How is that cash use Last the the year, look capital your changes for successful strong as Excellent. very million, -- below raising -- but you've I

Daniel Barel

Yes.

when it's good support facilities that, few very secured. from business able years that because equity model, side, companies the kicking been from the past I are financial a has testament think belief it's the in. we've general very I it to -- like -- that been the both and with it's straightforward in especially off in important financial and a things technology recently sector confidence to to credit production. think technology it's raising that the do in not seen And recognize to I our And we've be for think the strong

very very, that. with So we're happy

Hai burn, [indiscernible] forward, Going terms more think, some can give to of I in

Hai Aviv

the for Thanks question. Sure.

burn to the but million anticipate and CapEx start we we production start and XXXX. So as We in both expect an second half XXXX. $X average of both in monthly higher So plan CapEx first XXXX, on on -- in half OpEx [ a in spend basis, in spend be between will to of million $X that's the ] production half average we of burn. a monthly anticipated first the OpEx higher

Operator

Wainright. Next the Joshi Sameer line comes H.C. from from of question

Unknown Analyst

the Congrats on progress. all

are But set a the hundreds maybe up there or U.S. forward, second little bit a have vehicles, you part of is how least with the is see in at talking looking if to the Just forward, once half, your network at. need wanted to being investment that delivered partners? in own you business to you And So of looked meet effort? premature. that looking service in

Tali Miller

a will that on Maybe is add color. more have together and question. and across this for points. This put We just you U.S. bit little currently already in XX a service vehicle the Yes, network we've Canada sales the road. production be Thank support for here. to the all soon service to service Tali and

to was So that answer. complete just my

Unknown Analyst

Yes.

Okay.

So points those expanding is -- XX network? is it there service also sales points are

Daniel Barel

is correct. Yes, that

we're at surge in move want reservations, fleets basically, and capacity. the and look other enough their we look as So priority they plan compete way seeing the what to forward we're capacity on it secure and is securing trying at customers seeing now to electrification with

So slots. we're priority competition over seeing

just earlier at as with sale. we because, the that our ability also happening deliver and point is mentioned, maybe to to naturally, one, importantly, service and scale And but post our Motherson at not fact this segue that now of touched less partnership because our -- quality to this products is ability what is you them

dealer of points and can for selling based locations REE's network, serve one that the is vehicles, actually as to their So XX dealers service reservations. can North -- with in customers largest service the is which increase America also they

Unknown Analyst

but tariffs. could that about know on incentives high-level availing some a incentives, I know are I in portion, and a the the most There's customers incentives federal are jeopardy. of in, talks be probably of new are in your there administration question. U.S., there coming Also state-level Understood. the also

Just your point how to a you from U.S., wanted market incentives an of point understand of in view the view view? tariff from and both

Daniel Barel

recently, getting any, fleets, a is been question quite there and ownership right, appealing offers of the fleets we is that as OEMs naturally very for going SDV operational great our product generate our well software-defined efficiency. think impact, technology, We've cost our vehicle other Yes. because if bit. to which and leading to significant be And minimal of as TCO total

we think have that the market. we product really So strong good in a

So that's one.

also less where we're any are vehicles commercial seeing both that size further add play different the vehicle market that I I overall But than want speculate incentives, don't have I to to in incentives in especially not yet think I that, that a in the demand, incentive tax role origin. legislation think to very structures on of finalized. and think private --

Unknown Analyst

in answers parts are actually the as secured? that them? chain Like And the supply fully chain the secured? Understood. securing is on working was that Motherson the remarks prepared mentioned, the and Or is but plastics, these harnesses, then is for supply well,

Daniel Barel

production. started We

trucks. So we're producing

naturally that with So we're now Josh to on maybe past all optimize can more where But add point factors. on that. and color Motherson, improve some looking we're

Josh Tech

Yes.

the are and that efficient better, these and we can and faster, are more these things build cheaper Motherson again, trucks, produce harnesses to things basically. make -- Just print, also harnesses like faster

moving. take like things right they're that on bat, they that, So the can off

those So those low are voltage, parts, types harnesses, of things. the simpler XX-volt

in go of of stampings Motherson and the metals looking thing. ramping, supply that optimizations resourcing we other be growing As and terms kind chain through of we'll for at the and

that already the fruit that, are the around low-hanging they've around the things that bat, those So off over. could that take taken Motherson comment was

Operator

hand Daniel now for are I further any speakers, to speaker, conference remarks. for no to your questions there would the Barrell, Dear like over today. closing

Daniel Barel

thank you, and today. operator, everybody, joining you, for us Thank

-- this in before, We hear new very quarter. you said the are heading voices, it really, can optimistic about really I'm you we into our are sure And we year. like excited

updates a we're we'll looking to thank be And give. So that forward day. again, to and have able more you great

Operator

conference conclude for our Thank does you today. That participating. for

a day. Have now may disconnect. nice You all

REE Automotive (REE) 17 Dec 242024 Q3 Earnings call transcript