REE Automotive Ltd. Q2 FY2023 earnings call

• Achieved feasibility of x-by-wire system for FMVSS certification, contracted HORIBA MIRA for testing, on track to initiate full certification process and target pilot vehicle delivery by end 2023.
• Built dealer network across US and expanded to Canada, demand for commercial electric trucks growing with accessible charging infrastructure.
• Aftersales service key, REEcorners swap simplifies service, reducing inventory and uptime costs.
• Collaborating with work truck body manufacturers for full vehicle solutions available in 2024.
• Delivered first P7-S prototype to US fleet customer for closed track tests.
• X-by-wire system allows over-the-air updates, remote diagnostics, data-as-a-service for fleet management.
• Ended Q2 with $105 million liquidity, established $35 million ATM program and $15 million bank facility.

No detailed segment performance by product segments with absolute revenue and contribution % provided in the transcript.

• Targeting delivery of first pilot vehicles by end of 2023.
• Plan to reach cumulative sales of $1 billion from 2024-2026.
• Phase 1: Produce pilot vehicles from UK facility, kick-started $15 million production tooling in July 2023, expect to enter Phase 2 by Q4 2024 with up to 300 vehicles in 2024, ramping to low-1,000s in 2025 and mid-1,000s in 2026.
• Pilot vehicles to be delivered by end of 2023, with modest revenue in Q4 2023 and Q1 2024, then ramping up.

Q: Details on external testing for FMVSS certification A: Contracted HORIBA MIRA, testing showed x-by-wire architecture can meet FMVSS standards, iterative process with third-party testing Q: Sales outlook breakdown A: Phase 1 pilot vehicles from UK, Phase 2 ramping to 300 vehicles in 2024, low-1,000s in 2025, mid-1,000s in 2026 Q: $50 million investment and cash burn A: $15 million tooling program initiated, $50 million loan secured, need for additional $50 million in 2025 Q: Pilot vehicles and revenue recognition A: Pilot vehicles delivered by end of 2023, modest revenue in Q4 2023 and Q1 2024, then ramping Q: Average selling prices and inflation A: Not sharing exact prices, but confident in competitive pricing without relying on incentives Q: ASPs and inflation A: Business model not dependent on incentives, expect better pricing over time Q: Integration centers and future plans A: Building corners in UK initially, using contract manufacturer in US for Phase 2, flexible with Austin facility