REE Automotive Reports Fourth Quarter and Fiscal Year 2023 Financial Results

Rhea-AI Summary

REE Automotive (Nasdaq: REE) has achieved significant milestones by commercializing full x-by-wire technology, leading to sustainable growth. The company reported impressive Q4 2023 highlights, including substantial order book value growth, expansion of dealer network, technological certifications, successful winter testing, and financial stability with cash reserves and public offering.

Positive

• Commercialization of full x-by-wire technology for sustainable growth
• Impressive YoY order book value growth and dealer network expansion
• World's first FMVSS certification of a full by-wire vehicle
• Successful winter testing and vehicle delivery to customers
• Financial stability with significant cash reserves and successful public offering

Negative

• None.

Insights

Market Research Analyst

REE Automotive's announcement of its financial results and the expansion of its dealer network are key indicators of the company's growth trajectory and market penetration. The reported 900% year-over-year growth in the order book value is a significant metric that reflects increasing demand for REE's products. This growth, coupled with the expansion to 66 points of sale and service in the U.S. and Canada, suggests that REE is effectively scaling its operations and distribution capabilities.

Moreover, the eligibility of P7-C customers for federal and state incentives of over $100,000 may be a catalyst for increased sales, as it effectively reduces the total cost of ownership for end-users. This can be a competitive advantage in the electric vehicle (EV) market where cost and return on investment are critical considerations for customers. However, investors should also consider the 25% year-over-year decrease in free cash flow burn, which indicates that despite growth, the company is still in a cash-intensive phase of its lifecycle, which is common for companies in the EV sector.

Automotive Technology Expert

The FMVSS certification and CARB and EPA approvals for REE's full by-wire technology are significant achievements in the automotive industry. These certifications are essential for commercial vehicles to operate legally on U.S. roads and suggest that REE's technology meets rigorous safety and environmental standards. The successful winter testing further demonstrates the reliability of REE's vehicles under challenging conditions, which is important for fleet operators who require consistent performance year-round.

Investors interested in the automotive tech space should note that REE's CapEx deployment in REEcorner® production tooling indicates a commitment to innovation and the advancement of their proprietary technology. This could potentially lead to long-term advantages over competitors as they continue to refine and expand their technology offerings. However, the long-term success will depend on the company's ability to maintain technological leadership and convert technological achievements into sustainable profitability.

Financial Analyst

The $86 million in cash and cash equivalents and short-term investments position REE Automotive with a solid liquidity status to support ongoing operations and investment in growth. However, the recent public offering of shares at $6.50 per share, which raised approximately $15 million, may suggest the need for additional capital to fund operations or expansion efforts. This could potentially dilute existing shareholders' value but also provides the company with necessary funds to capitalize on market opportunities.

Investors should evaluate the implications of REE's financial strategies in the context of the broader EV market, which is characterized by high competition and significant capital requirements for research, development and scaling operations. The balance between growth investments and cash burn rate is a critical factor to monitor, as it can impact the company's financial stability and ability to respond to market changes.

REE has accomplished the majority of its milestones as the first to commercialize full x-by-wire technology, setting the path for sustainable growth

TEL AVIV, Israel, March 27, 2024 (GLOBE NEWSWIRE) -- REE Automotive Ltd. (Nasdaq: REE), an automotive technology company and provider of full by-wire electric trucks and platforms, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2023, through a shareholder letter posted on the company’s investor relations website HERE.

The company will also hold a conference call today, March 27, 2024, at 8:30 a.m. ET. The live webcast of the conference call can be accessed on the Investors section of the Company’s website HERE. For the telephone conference online registration click HERE.

Q4 2023 Highlights:

• Business:
  • P7-C customers are eligible for federal and state incentives of over $100,000
  • 900% growth YoY order book value
  • Order book value exceeds $50 million
  • Dealer network continues to expand to 66 points of sale and service¹ in the U.S. and Canada
• Technology:
  • Achieved world’s first FMVSS certification of a full by-wire vehicle¹
  • Received CARB certifications ¹ and U.S. Environmental Protection Agency (EPA) approval
  • Successful winter testing for second consecutive year
• Operation:
  • First vehicle driven off the line, upfitted with a Knapheide body and delivered to customer¹
  • Completed CapEx deployment of REEcorner® production tooling
• Finance:
  • $86 million in cash & cash equivalents and short-term investments² as of Dec 31, 2023
  • 25% decrease YoY in free cash flow burn
  • Raised approximately $15 million through underwritten public offering of straight ordinary shares at a price of $6.50 per share¹

To learn more about REE Automotive’s patented technology and unique value proposition that position the company to break new ground in e-mobility, visit www.ree.auto.

About REE Automotive
REE Automotive (Nasdaq: REE) is an automotive technology company that allows companies to build electric vehicles of various shapes and sizes on their modular platforms. With complete design freedom, vehicles Powered by REE® are equipped with the revolutionary REEcorner®, which packs critical vehicle components (steering, braking, suspension, powertrain and control) into a single compact module positioned between the chassis and the wheel. As the first company to FMVSS certify a fully by-wire vehicle in the U.S., REE’s proprietary by-wire technology for drive, steer and brake control eliminates the need for mechanical connection. Using four identical REEcorners® enables REE to make the industry’s flattest EV platforms with more room for passengers, cargo and batteries. REE platforms are future proofed, autonomous capable, offer a low TCO, and drastically reduce the time to market for fleets looking to electrify. To learn more visit www.ree.auto.

Media Contact
Malory Van Guilder
Skyya PR for REE Automotive
+1 651-335-0585
ree@skyya.com

Investor Contact
Kamal Hamid
VP Investor Relations | REE Automotive
+1 303-670-7756
investors@ree.auto

Caution About Forward-Looking Statements
This communication includes certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements regarding REE or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. For example, REE is using forward-looking statements when it discusses its belief that it is setting the path for sustainable growth. In addition, any statements that refer to plans, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “aim” “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would”, “designed,” “target” and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements, other than statements of historical facts, may be forward-looking statements. Forward-looking statements in this communication may include, among other things, statements about REE’s strategic and business plans, technology, relationships and objectives, including its ability to meet certification requirements, the impact of trends on and interest in our business, or product, intellectual property, REE’s expectation for growth, and its future results, operations and financial performance and condition.

These forward-looking statements are based on REE’s current expectations and assumptions about future events and are based on currently available information as of the date of this communication and current expectations, forecasts, and assumptions. Although REE believes that the expectations reflected in forward-looking statements are reasonable, such statements involve an unknown number of risks, uncertainties, judgments, and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. These factors are difficult to predict accurately and may be beyond REE’s control. Forward-looking statements in this communication speak only as of the date made and REE undertakes no obligation to update its forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this communication may not occur.

Uncertainties and risk factors that could affect REE’s future performance and could cause actual results to differ include, but are not limited to: REE’s ability to commercialize its strategic plan, including its plan to successfully evaluate, obtain regulatory approval, produce and market its P7 lineup; REE’s ability to maintain and advance relationships with current Tier 1 suppliers and strategic partners; development of REE’s advanced prototypes into marketable products; REE’s ability to grow and scale manufacturing capacity through relationships with Tier 1 suppliers; REE’s estimates of unit sales, expenses and profitability and underlying assumptions; REE’s reliance on its UK Engineering Center of Excellence for the design, validation, verification, testing and homologation of its products; REE’s limited operating history; risks associated with building out of REE’s supply chain; risks associated with plans for REE’s initial commercial production; REE’s dependence on potential suppliers, some of which will be single or limited source; development of the market for commercial EVs; risks associated with data security breach, failure of information security systems and privacy concerns; risks related to lack of compliance with Nasdaq’s minimum bid price requirement; future sales of our securities by existing material shareholders or by us could cause the market price for the Class A Ordinary Shares to decline; potential disruption of shipping routes due to accidents, political events, international hostilities and instability, piracy or acts by terrorists; intense competition in the e-mobility space, including with competitors who have significantly more resources; risks related to the fact that REE is incorporated in Israel and governed by Israeli law; REE’s ability to make continued investments in its platform; the impact of the COVID-19 pandemic, interest rate changes, the ongoing conflict between Ukraine and Russia and any other worldwide health epidemics or outbreaks that may arise and adverse global conditions, including macroeconomic and geopolitical uncertainty; the global economic environment, the general market, political and economic conditions in the countries in which we operate; the ongoing military conflict in Israel; fluctuations in interest rates and foreign exchange rates; the need to attract, train and retain highly-skilled technical workforce; changes in laws and regulations that impact REE; REE’s ability to enforce, protect and maintain intellectual property rights; REE’s ability to retain engineers and other highly qualified employees to further its goals; and other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in REE’s annual report filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 28, 2023 and in subsequent filings with the SEC.

_________________

¹ subsequent to year end
² includes $15 million credit bank facility

FAQ

What is the ticker symbol for REE Automotive ?

The ticker symbol for REE Automotive is REE.

What were the Q4 2023 highlights for REE Automotive ?

The Q4 2023 highlights for REE Automotive include substantial order book value growth, dealer network expansion, technological certifications, successful winter testing, and financial stability.

What certifications did REE Automotive receive in Q4 2023?

In Q4 2023, REE Automotive received the world's first FMVSS certification of a full by-wire vehicle, CARB certifications, and U.S. Environmental Protection Agency (EPA) approval.

What was the financial status of REE Automotive as of Dec 31, 2023?

As of Dec 31, 2023, REE Automotive had $86 million in cash & cash equivalents and short-term investments, with a 25% decrease YoY in free cash flow burn.

How much did REE Automotive raise through a public offering in Q4 2023?

In Q4 2023, REE Automotive raised approximately $15 million through an underwritten public offering of straight ordinary shares at a price of $6.50 per share.