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REE Automotive Ltd.

REE Automotive Ltd.REE決算レポート

Nasdaq · 産業 · 自動車及び乗用車車体

REE Automotive, Ltd. is an automotive software developer. The company previously developed an electric vehicle platform featuring independent interchangeable corner modules, dubbed REECorners. The corner modules are positioned directly adjacent to each wheel, and they encapsulate all of the vehicle's drive systems such as the motor, inverter, steering, brakes, and suspension. They are controlled electronically, by-wire, allowing for a completely flat platform chassis onto which custom chassis...

What changed in REE Automotive Ltd.'s 20-F — 2023 vs 2024

Top changes in REE Automotive Ltd.'s 2024 20-F

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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REE believes these factors include: • the difference in the initial purchase prices of EVs with comparable vehicles powered by internal combustion engines, both including and excluding the effect of government and other subsidies and incentives designed to promote the purchase of EVs; • the TCO of the vehicle over its expected life, which includes the initial purchase price and ongoing operating and maintenance costs; • the availability and terms of financing options for purchases of vehicles and, for EVs, financing options for battery or fuel cell systems; • the availability of tax and other governmental incentives to purchase and operate EVs and future regulations requiring increased use of nonpolluting vehicles; • government regulations and economic incentives promoting fuel efficiency and alternate forms of energy; 12 Table of Contents • fuel prices, including volatility in the cost of diesel or a prolonged period of low gasoline and natural gas costs that could decrease incentives to transition to EVs; • the cost and availability of other alternatives to diesel fueled vehicles, such as vehicles powered by natural gas; • corporate sustainability initiatives; • EV quality, performance and safety (particularly with respect to lithium-ion battery packs or fuel cells); • the quality and availability of service for the vehicle, including the availability of replacement parts; • the limited range over which EVs may be driven on a single charge; • increased competition with other companies also developing zero-emission electric and autonomous vehicles; • access to charging stations and related infrastructure costs, and standardization of EV charging systems; • electric grid capacity and reliability; and • macroeconomic factors.
REE believes these factors include: • the difference in the initial purchase prices of EVs with comparable vehicles powered by internal combustion engines, both including and excluding the effect of government and other subsidies and incentives designed to promote the purchase of EVs; • the TCO of the vehicle over its expected life, which includes the initial purchase price and ongoing operating and maintenance costs; • the availability and terms of financing options for purchases of vehicles and, for EVs, financing options for battery or fuel cell systems; • the availability of tax and other governmental incentives to purchase and operate EVs and future regulations requiring increased use of nonpolluting vehicles; • government regulations and economic incentives promoting fuel efficiency and alternate forms of energy; • fuel prices, including volatility in the cost of diesel or a prolonged period of low gasoline and natural gas costs that could decrease incentives to transition to EVs; • the cost and availability of other alternatives to diesel fueled vehicles, such as vehicles powered by natural gas; • corporate sustainability initiatives; • EV quality, performance and safety (particularly with respect to lithium-ion battery packs or fuel cells); • the quality and availability of service for the vehicle, including the availability of replacement parts; • the limited range over which EVs may be driven on a single charge; • increased competition with other companies also developing zero-emission electric and autonomous vehicles; • access to charging stations and related infrastructure costs, and standardization of EV charging systems; • electric grid capacity and reliability; and • macroeconomic factors.
Investors should be aware of the difficulties normally encountered by a new player in the EV industry, many of which are beyond REE’s control, including substantial risks and expenses in the course of establishing or entering new markets, organizing operations and undertaking marketing activities.
Investors should be aware of the difficulties normally encountered by a new player in the SDV and EV industry, many of which are beyond REE’s control, including substantial risks and expenses in the course of establishing or entering new markets, organizing operations and undertaking marketing activities.
REE faces risks and challenges as an early stage company with a limited operating history. REE has a limited operating history in the automotive industry on which investors can base an evaluation of its business, operating results and prospects.
REE faces risks and challenges as an early stage company with a limited operating history. REE has a limited operating history in the automotive technology industry on which investors can base an evaluation of its business, operating results and prospects.
Promoting and positioning its brand will likely depend significantly on REE’s ability to provide high quality products and engage with its potential customers as intended, and REE has limited experience in these areas.
Promoting and positioning its brand and its technology products will likely depend significantly on REE’s ability to provide high quality products and engage with its potential customers as intended, and REE has limited experience in these areas.
There is risk of disputes with current and potential suppliers, dealers and strategic partners, and REE could be affected by adverse publicity related to its current and potential suppliers, dealers or strategic partners whether or not such publicity is related to their collaboration with REE.
There is also risk of disputes with current and potential suppliers, dealers and strategic partners, and REE could be affected by adverse publicity related to its current and potential suppliers, dealers or strategic partners whether or not such publicity is related to their collaboration with REE.
REE’s novel technology and design may not align with existing or potential consumer preferences and consumers may be reluctant to acquire a vehicle built upon a new and unproven EV platform.
REE’s novel technology and design may not align with existing or potential consumer preferences and consumers may be reluctant to acquire a vehicle built upon a new and unproven SDV platform and/or EV platform.
As new companies and larger, existing vehicle manufacturers enter the EV space, REE may lose any technological advantage it may have had in the marketplace and suffer a decline in its position in the market. As technologies change, REE plans to upgrade or adapt its products to continue to provide products with the latest technology.
As new companies and larger, existing vehicle manufacturers enter both the SDV and EV space, REE may lose any technological advantage it may have had in the marketplace and suffer a decline in its position in the market. As technologies change, REE plans to upgrade or adapt its products to continue to provide products with the latest technology.
Many of these factors are largely outside of REE’s control, and negative perceptions about REE’s business prospects, would likely harm its ability to receive additional orders. In addition, a significant number of new electric vehicle companies have recently entered the automotive industry, which is an industry that has historically had significant barriers to entry and a high rate of failure.
Many of these factors are largely outside of REE’s control, and negative perceptions about REE’s business prospects, would likely harm its ability to receive follow-on orders. In addition, a significant number of new electric vehicle companies have recently entered the automotive industry, which is an industry that has historically had significant barriers to entry and a high rate of failure.
If these new entrants or other manufacturers of electric vehicles go out of business, produce vehicles that do not perform as expected or otherwise fail to meet expectations, such failures may have the effect of increasing scrutiny of others in the industry, including REE, and further challenging customer, dealer, supplier and analyst confidence in REE’s business prospects.
If these new entrants or other manufacturers of electric vehicles go out of business, such as those described above, produce vehicles that do not perform as expected or otherwise fail to meet expectations, such failures may have the effect of increasing scrutiny of others in the industry, including REE, and further challenging customer, dealer, supplier and analyst confidence in REE’s business prospects.
In addition, REE’s ability to develop, maintain and strengthen the “Powered by REE TM ” brand and the REE brand generally will depend heavily on the success of its customer development and branding efforts.
In addition, REE’s ability to develop, maintain and strengthen the “Powered by REE TM ” brand and technology products and the REE brand generally will depend heavily on the success of its customer development and branding efforts.
Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates and credit availability, consumer confidence, fuel costs, fuel availability, environmental impact, governmental incentives and regulatory requirements and political volatility, especially in energy-producing countries and growth markets.
Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates and credit availability, tariffs and trade wars, consumer confidence, fuel costs, fuel availability, environmental impact, governmental incentives and regulatory requirements and political volatility, especially in energy-producing countries and growth markets.
REE’s existing agreements and REE’s ability to engage with definitive agreements with current and potential suppliers, dealer or strategic partners are and will be subject to a number of risks with respect to operations that are outside REE’s control, any of which may materially and adversely affect REE’s business and prospects.
REE is subject to risks associated with strategic partners. REE’s existing agreements and REE’s ability to engage with definitive agreements with current and potential suppliers, dealer or strategic partners are and will be subject to a number of risks with respect to operations that are outside REE’s control, any of which may materially and adversely affect REE’s business and prospects.
Any failure to develop such production processes and capabilities within REE’s projected costs and timelines could have a material adverse effect on its business, prospects, financial condition and operating results. REE’s development of an outsourced manufacturing business model may not be successful, which could harm its ability to deliver products and recognize revenue.
Any failure to develop such production processes and capabilities within REE’s projected costs and timelines could have a material adverse effect on its business, prospects, financial condition and operating results. If and when REE resumes manufacturing, REE’s development of an outsourced manufacturing business model may not be successful, which could harm its ability to deliver products and recognize revenue.
In addition, although REE intends to be involved in material decisions in the supply chain and manufacturing process, given that REE also will rely on its current and potential suppliers, dealers and strategic partners to meet its quality standards, there can be no assurance that REE will be 16 Table of Contents able to maintain high quality standards for its products.
In addition, although REE intends to be involved in material decisions in the supply chain and manufacturing process, given that REE also will rely on its current and potential suppliers, dealers and strategic partners to meet its quality standards, there can be no assurance that REE will be able to maintain high quality standards for its products.
REE may not be able to compete successfully in the market as a result of rapid changes in EV technology and the entrance of new and existing, larger manufacturers into the EV space. REE’s products are being designed for use with, and depend upon, existing vehicle technology.
REE may not be able to compete successfully in the market as a result of rapid changes in software-defined technology and/or EV technology and the entrance of new and existing, larger manufacturers into both the software-defined vehicle and EV space. REE’s products are being designed for use with, and depend upon, existing vehicle technology.
Even if REE and its suppliers and strategic partners are successful in developing the initial production processes, developing future high volume production capability, and reliably sourcing the component supply, REE does not know whether it will be able to do so in a manner that avoids significant delays and cost overruns, including those that result from factors beyond its control such as problems with suppliers and strategic partners or dealing with force majeure events, or that meets its products commercialization schedules or that satisfies the requirements of its potential customer base.
Even if REE and its suppliers and strategic partners are successful in developing the initial production processes, developing future high volume production capability, and reliably sourcing the component supply, REE does not know whether it will be able to do so in a manner that avoids significant delays and cost overruns, including those that result from factors beyond its control such as problems with suppliers and strategic partners or dealing with force majeure events (which include tariffs from the Trump Administration and retaliatory measures by its trading partners), or that meets its products commercialization schedules or that satisfies the requirements of its potential customer base.
If, in weighing these factors, OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS providers and autonomous drive companies determine that there is not a compelling business justification for purchasing EVs, particularly those built on products by REE, then the market for EVs may not develop as REE expects or may develop more slowly than REE expects, which would adversely affect REE’s business, prospects, financial condition and operating results.
If, in weighing these factors, OEMs, delivery and logistic fleets, dealers, new mobility players, MaaS providers and autonomous drive companies determine that there is not a compelling business justification for purchasing EVs, particularly those built on products by REE, then the market for EVs may not develop as REE expects or may develop 16 Table of C ontents more slowly than REE expects, which would adversely affect REE’s business, prospects, financial condition and operating results.
However, such expansion would require REE to make significant expenditures, including the hiring of local employees and establishing facilities, in advance of generating any revenue. REE is subject to 13 Table of Contents a number of risks associated with international business activities that may increase its costs, impact its ability to sell its products and require significant management attention.
However, such expansion would require REE to make significant expenditures, which may include the hiring of local employees and establishing facilities, in advance of generating any revenue. REE is subject to a number of risks associated with international business activities that may increase its costs, impact its ability to sell its products and require significant management attention.
As part of REE’s sales efforts, REE must demonstrate to OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS providers and autonomous drive companies the savings during the life of the vehicle and the lower total cost of ownership, or TCO, of vehicles built on the REE products.
As part of REE’s sales efforts, REE must demonstrate to OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS providers and autonomous drive companies the savings during the life of the vehicle and, if and when REE resumes manufacturing, the lower total cost of ownership, or TCO, of vehicles built on the REE’s technology.
REE believes that OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS providers and autonomous drive companies consider many factors when deciding whether to purchase REE’s products (or EVs generally) over vehicles powered by internal combustion engines, particularly diesel-fueled or natural gas-fueled vehicles.
With respect to its vehicles, if and when we resume manufacturing, REE believes that OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS providers and autonomous drive companies consider many factors when deciding whether to purchase REE’s products (or EVs generally) over vehicles powered by internal combustion engines, particularly diesel-fueled or natural gas-fueled vehicles.
Both the automobile industry generally, and the EV segment in particular, are highly competitive, and REE will be competing for sales with both internal combustion engine, or ICE, vehicles and EVs.
Both the automobile industry generally, and the EV segment in particular, are highly competitive, and REE competes for sales with both internal combustion engine, or ICE, vehicles and EVs.
There can be no assurance, therefore, that there will not be some components sourced from suppliers subject to sanctions against Russia nor that the resulting disruption to the supply chain will not have an adverse impact on REE’s business and results of operations.
There can be no assurance, therefore, that there will not be some components sourced from suppliers subject to sanctions compliance with respect to Russia nor that the resulting disruption to the supply chain due to such sanctions will not have an adverse impact on REE’s business and results of operations.
In addition, the reduction, elimination or selective application of tax and other governmental incentives and subsidies resulting from policy changes, or the reduced need for such subsidies and incentives due to the perceived success of the EV, fiscal tightening or other reasons may result in the diminished competitiveness of the EV industry generally or EVs built on the REE products in particular, which could in turn adversely affect REE’s business, prospects, financial condition and operating results.
In addition, the reduction, elimination or selective application of tax and other governmental incentives and subsidies resulting from policy changes (including any related impacts from actions by the Trump Administration with respect to EV), or the reduced need for such subsidies and incentives due to the perceived success of the EV, fiscal tightening or other reasons may result in the diminished competitiveness of the EV industry generally or EVs built on the REE products in particular, which could in turn adversely affect REE’s business, prospects, financial condition and operating results.
REE’s ability to become profitable in the future will not only depend on its ability to successfully market its products, but also to control its costs. If REE is unable to efficiently design, assemble, market, sell and distribute its products, then we may not be able to achieve profitable operations.
REE’s ability to become profitable in the future will not only depend on its ability to successfully sell its products, but also to control its costs. If REE is unable to accomplish any of the following then we may not be able to achieve profitable operations: efficiently design, source parts, assemble, sell and distribute its products.
These assumptions represent REE’s best estimates and there can be no assurance that the actual results will be in line with REE’s expectations.
These assumptions represent REE’s best estimates but may prove inaccurate and there can be no assurance that the actual results will be in line with REE’s expectations.
REE may not succeed in establishing, maintaining and strengthening the “Powered by REE TM ” brand, which could materially and adversely affect customer acceptance of its vehicles and components, thus negatively impacting its business, prospects and projected revenue.
REE may not succeed in establishing, maintaining and strengthening the “Powered by REE TM ” brand and/or technology products, which could materially and adversely affect customer acceptance of its SDV products, thus negatively impacting its business, prospects and projected revenue.
REE’s future sales and operations in international markets may expose it to operational, financial and regulatory risks, including but not limited to unfavorable regulatory, political, tax and labor conditions which could negatively impact the business. REE faces risks associated with its international operations, including possible unfavorable regulatory, political, tax and labor conditions, which could harm its business.
REE’s future sales and operations in international markets may expose it to operational, financial and regulatory risks, including but not limited to unfavorable regulatory, political, tax and labor conditions which could negatively impact the business.
Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in downward price pressure and adversely affect REE’s business, financial condition, operating results, and prospects.
Lower demand and/or heavy competition for that demand may lead to lower vehicle unit sales and increased unsold inventory, which may result in downward price pressure and adversely affect REE’s business, financial condition, operating results, and prospects.
REE does not know whether its suppliers or strategic partners will be able to develop efficient, automated, low-cost production capabilities and processes and reliable sources of component supply, that will enable REE to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully mass market REE’s products on its anticipated timeframe.
If and when REE resumes manufacturing, it does not know whether its suppliers or strategic partners will be able to develop efficient, automated, low-cost production capabilities and processes and reliable sources of component supply, that will enable REE to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully deliver REE’s products on an anticipated timeframe, or at all.
Risks Related to REE’s Strategy REE’s business model has not been proven and any failure to obtain significant orders for its products would have an adverse effect on its operating results, business, or reputation, resulting in substantial liabilities that may exceed its resources.
Risks Related to REE’s Strategy REE’s business model has not been proven and any failure to obtain significant orders for its products would adversely affect our operating results, business, or reputation, resulting in substantial liabilities that may exceed its resources.
In addition, the global macroeconomic environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased trade tariffs and trade disputes, rising inflation, instability in the global credit markets, banks and financial institutions entering receivership or becoming insolvent, supply chain weaknesses, instability in the geopolitical environment and increasing tensions between China and Taiwan, uncertainty surrounding future elections and the outcome of proposed judicial reform in Israel, and other political tensions, and foreign governmental debt concerns.
In addition, the global macroeconomic environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased trade tariffs and trade disputes, rising inflation, instability in the global credit markets, banks and financial institutions entering receivership or becoming insolvent, supply chain weaknesses, instability in the geopolitical environment and increasing tensions, including between China and Taiwan and between the U.S. and Iran, and other political tensions, and foreign governmental debt concerns.
If REE fails to successfully address these risks, its business, prospects, operating results and financial condition could be materially harmed. Adverse global conditions, including macroeconomic and geopolitical uncertainty, may negatively impact our financial results. Global conditions, dislocations in the financial markets, or inflation could adversely impact our business.
If REE fails to successfully manage these risks, its business, prospects, operating results and financial condition could be materially and adversely affected. Adverse global conditions, including macroeconomic, protectionist trade policies and tariffs, geopolitical uncertainty, and other events may negatively impact our financial results. Global conditions, dislocations in the financial markets, or inflation could adversely impact our business.
In addition, whether actual operating and financial results and business development will be consistent with REE’s expectations and assumptions as reflected in forecasts depends on a number of factors, many of which are outside REE’s control, including, but not limited to: • the extent to which projections of operating expense and unit sales will reflect the actual operating expense and sale of REE products in the future; • the extent to which REE can actualize the value proposition of REE products including, but not limited to, cost efficiencies related to its business model with limited capital expenditure requirements and projected total cost of ownership, and the availability of mission-specific vehicles that maximize cabin and storage space on a smaller overall footprint; • there is no guarantee that REE will be able to successfully outsource manufacturing and utilize future Integration Centers for the assembly of REE products beyond our first Integration Center in Coventry, United Kingdom, or the UK Integration Center; • the extent to which growth of e-mobility markets and continued shift in consumer preference will conform with projections; • although REE is focusing on Class 3 through 5 platform models for the P7 EV platform, REE’s ability to validate, verify and test other REE products compatible with the Class 1 through Class 6 platform, which the failure to do so with respect to any class would reduce REE’s projected total addressable market; • the extent to which REE’s projected bill of materials conform with the actual bill of materials upon start of production, deviation from which could negatively impact the projected total cost of ownership or projected gross margin; • supply chain disruptions and shortages of raw materials, parts, components and systems used in our production process; • the projected total cost of ownership is based upon a number of projected factors based on management expectations, the deviation from which could negatively impact the actual total cost of ownership offered to potential customers; 11 Table of Contents • homologation of full vehicles; • certification of X-by-Wire technology; • top-hat partnerships to build full EVs; • whether REE can obtain sufficient capital to sustain and grow its business; and • the timing and costs of new and existing marketing and promotional efforts, including with respect to the “Powered by REE TM ” brand.
In addition, whether actual operating and financial results and business development will be consistent with REE’s expectations and assumptions as reflected in forecasts depends on a number of factors, many of which are beyond REE’s control, including, but not limited to: • the extent to which projections of operating expenses will reflect the actual operating expenses and sale of REE products in the future; • the extent to which REE can actualize the value proposition of REE products including, but not limited to, cost efficiencies related to its business model with limited capital expenditure requirements and projected total cost of ownership, and, if and when REE resumes the manufacturing of its vehicles,the availability of mission-specific vehicles that maximize cabin and storage space on a smaller overall footprint; 14 Table of C ontents • beyond our first Integration Center in Coventry, UK, or the UK Integration Center, and contract manufacturing by Roush Industries, there is no guarantee that REE will be able to successfully outsource additional manufacturing and utilize future Integration Centers for the assembly of REE products, if and when REE resumes manufacturing its vehicles; • the extent to which growth of e-mobility markets and continued shift in consumer preference will conform with projections; • although REE is focusing on Class 4 through 5 platform models for the P7 EV platform, REE’s ability to validate, verify and test other REE products compatible with the Class 1 through Class 6 platform, which the failure to do so with respect to any class would reduce REE’s projected total addressable market; • if and when REE resumes manufacturing its vehicles, the extent to which REE’s projected bill of materials conform with the actual bill of materials upon start of production, deviation from which could negatively impact the projected total cost of ownership or projected gross margin; • supply chain disruptions and shortages of raw materials, parts, components and systems used in our production process, including relating to our SoC; • if and when REE returns to manufacturing its vehicles, the projected total cost of ownership is based upon a number of projected factors based on management expectations, the deviation from which could negatively impact the actual total cost of ownership offered to potential customers; • partnerships with upfitters to build finished SDVs, if and when REE resumes manufacturing its vehicles; and • whether REE can obtain sufficient capital to sustain and grow its business.
REE could experience delays to the extent its current and potential suppliers, dealers or strategic partners do not continue doing business with REE, meet agreed upon timelines, experience capacity constraints or otherwise are unable to deliver components or manufacture products as expected.
REE could experience delays to the extent its current and potential suppliers, dealers or strategic partners do not continue doing business with REE (including as a result of our delay in manufacturing), meet agreed upon timelines, achieve operational efficiencies, experience capacity constraints or otherwise are unable to deliver components or manufacture products as expected.
Specific to the electric vehicle segment in the automotive industry, challenges have arisen due to a variety of factors, including an increase in the costs of certain components or parts of electric vehicles, such as batteries, caused by supply chain disruptions and shortages of raw materials, market participants over-promising and under-delivering on their production capabilities and the slow deployment and resulting availability of charging networks for electric vehicles.
Specific to the electric vehicle segment in the automotive industry, challenges may arise due to a variety of factors, including an increase in the costs of certain components or parts of electric vehicles, caused by supply chain disruptions and shortages of raw materials, U.S. tariffs (including but not limited to with respect to China-sourced lithium-ion batteries), market participants over-promising and under-delivering on their production capabilities and the slow deployment and resulting availability of charging networks for electric vehicles.
REE’s business model is unique because REE can market and sell our products individually or as “Powered by REE™” in a full vehicle solution.
REE’s business model is unique because REE can market and sell our products individually, such as our P7 lineup, or as a full or partial “Powered by REE™” or other technology solution .
REE has operations or subsidiaries in Israel, the U.S., the UK, Germany, and Japan that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. Additionally, as part of its growth strategy, REE intends to expand its manufacturing partnerships, assembly facilities and sales activity internationally.
These operations, subsidiaries, and/or sales are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions, as applicable. Additionally, as part of its growth strategy, REE intends to expand its manufacturing partnerships, assembly facilities and sales activity internationally to markets outside of North America.
REE will require significant capital to develop and grow its business, including developing and assembling REE products, building future Integration Centers, maintaining the current UK Integration Center and developing REE’s intellectual property portfolio and brand.
The manufacturing of vehicles will require significant capital to develop and grow its business and to produce and scale the production of vehicles,including maintaining its supply chain, developing and assembling REE products, ramping up the production and assembly of REE products, building future Integration Centers, maintaining the current UK Integration Center and developing REE’s intellectual property portfolio and brand.
REE recently started receiving initial orders for both the P7-C. Such orders present an opportunity for potentially receiving additional orders in the future that could be more meaningful and impactful from a financial perspective.
REE has received initial orders for both the P7-C and P7-S. If and when REE resumes manufacturing, such orders present an opportunity for potentially receiving additional follow-on orders in the future that could be more meaningful and impactful from a financial perspective.
In the event geopolitical tensions deteriorate further or fail to abate, additional governmental sanctions may be enacted that could adversely impact the global economy, banking and monetary systems, markets, and the operations of REE and its suppliers.
In the event geopolitical tensions deteriorate further or fail to abate, additional governmental sanctions may be enacted that could adversely impact the global economy, banking and monetary systems, markets, and the operations of REE and its suppliers. In addition, REE may not be able to access a portion of its existing cash, cash equivalents and investments due to market conditions.
REE will continue to encounter risks and difficulties frequently experienced by companies in the early stages of commercialization, including scaling up REE’s infrastructure, commercialization and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with its growth. In addition, REE expects to continue to sustain substantial operating expenses without generating sufficient revenues to cover expenditures.
REE will continue to encounter risks and difficulties frequently experienced by companies in the early stages of commercialization, including, if applicable, scaling up REE’s infrastructure, commercialization and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with its growth.
Such challenges have caused, and may continue to cause, uncertainty and instability in local economies and in global financial markets, which may adversely affect our business. For additional information, see “ Item 3. Key Information – D.
Such challenges have caused, and may continue to cause, uncertainty and instability in local economies and in global financial markets, which may adversely affect our business.
The entry of EV products into the commercial EV market is a relatively new development and is characterized by rapidly changing technologies and evolving government regulation, industry standards and customer views of the merits of using EVs in their businesses. This process has been slow to date.
The entry of SDV products into the market is a relatively new development and is characterized by rapidly changing technologies and evolving government regulation, industry standards and customer views of the merits of using SDVs in their businesses.
REE’s growth depends upon the adoption of EVs by original equipment manufacturers, or OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, Mobility-as-a-Service, or MaaS, providers and autonomous drive companies and on REE’s ability to produce, assemble and sell products that meet their needs.
REE’s growth depends upon the adoption of SDVs by OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS, providers and autonomous drive companies, its ability to sell products that meet their needs and, if and when REE resumes manufacturing, on REE’s ability to produce and assemble its vehicles.
REE expects competition for EVs to intensify due to increased demand and a regulatory push for alternative fuel vehicles, continuing globalization, and consolidation in the worldwide automotive industry. Factors affecting competition include product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service, and financing terms.
On the one hand, REE has observed and continues to expect competition for EVs to continue due to present demand continuing globalization, and consolidation in the worldwide automotive industry. Factors affecting competition include product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service, and financing terms.
The “Powered by REE TM ” approach reflects REE’s mission to become the cornerstone upon which mobility players can build their mission-specific vehicle needs with the goal of completing rather than competing with other market participants.
REE market its products, including its X-by-Wire technology, as both an individual product and as a partial or full vehicle solution. The “Powered by REE TM ” approach reflects REE’s mission to become the cornerstone upon which mobility players can build their mission-specific vehicle needs with the goal of completing rather than competing with other market participants.
Since REE is in the early stages of commercializing its automotive products, it is difficult to predict REE’s future revenues and expenses, and REE has limited insight into trends that may emerge and affect its business.
Since REE is in the early stages of commercializing its SDV technological products, it is difficult to predict REE’s future revenues, if any, and expenses, and REE has limited insight into trends that may emerge and affect its business. There is no assurance that customers and potential customers will purchase REE’s products in volumes sufficient to achieve profitability.
Maintaining such confidence may be particularly difficult as a result of many factors, including REE’s limited operating history, others’ unfamiliarity with its products, uncertainty regarding the future of electric vehicles, any delays in scaling production, delivery and service operations to meet demand, competition and REE’s production and sales performance compared with market expectations.
Maintaining such confidence may be particularly difficult as a result of many factors, including REE’s limited operating history, others’ unfamiliarity with its products, uncertainty regarding the future of electric vehicles (including recent bankruptcies or restructurings by Nikola Corp., Arrival S.à r.l, Fisker Inc., and Lion Electric Inc., which make the EV market in general, and REE in particular, appear more speculative and less of a solidified alternative to ICE vehicles) any delays in scaling production, delivery and service operations to meet demand, competition and REE’s production and sales performance compared with market expectations.
The development of REE’s products is and will be subject to risks including, but not limited to, risks associated with: • REE’s ability to validate final marketable products; • REE’s ability to complete the final marketable product design process on time, if at all; • the ability for REE’s products to meet the stringent level of functional safety required for X-by-Wire; • the ability for REE’s products to withstand rigorous testing and validation; • the ability for REE’s products to satisfy testing and validation standards set by external assessors; • the ability of REE’s products to meet existing or future automotive industry standards; • REE’s ability to successfully develop and validate true X-by-Wire Control capabilities; and • the ability of X-by-Wire Control technology to obtain additional regulatory approval and achieve widespread market acceptance. 17 Table of Contents REE is subject to risks associated with the anticipated timing of REE’s initial commercial production and subsequent increased commercial production.
The development of REE’s products is and may be subject to risks including, but not limited to, risks associated with: • REE’s ability to complete the final product design process on time, if at all; • the ability for REE’s products to withstand rigorous testing and validation, including as set by external assessors over time; • the ability of REE’s products to meet existing or future automotive industry standards; and • the ability of X-by-Wire Control technology to achieve widespread market acceptance.
Any forecasts provided by us reflect management’s estimate of future performance when such forecasts are provided and involve risks, assumptions and uncertainties, projected operating expense, including the level of demand for REE’s products, the performance of REE’s products, the projected bill of materials for REE’s products, the projected gross margin achievable upon sale of REE’s products, the development and commercialization of REE’s products, potential market and sector opportunities, the roll out of REE’s future facilities to assemble REE products, or Integration Centers, the production capacity of REE’s UK Integration Center and any future Integration Centers, the selection of REE’s products by customers and by segment, and growth in the various markets REE is targeting.
These forecasts are based on numerous assumptions and subject to a variety of risks and uncertainties, including assumptions about projected operating expense, the level of demand for REE’s products, the performance of REE’s products, the projected bill of materials for REE’s products and the bill of materials breakeven, each if and when REE resumes the manufacturing of its P7 vehicles, EBITDA positive assumptions, the projected gross margin achievable upon sale of REE’s products, the development and commercialization of REE’s products, potential market and sector opportunities, the production capacity of REE’s UK Integration Center and any future Integration Centers, if and when REE resumes manufacturing, the selection and purchase of REE’s products by customers and by segment, and growth in the various markets that REE is targeting.
In addition, REE could be subject to adverse publicity related to REE’s potential customers who build vehicles on REEplatforms TM whether or not such publicity related to such potential customers’ “Powered by REE TM ” vehicles, any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in the “Powered by REE TM ” brand and the REE brand generally.
In addition, REE could be subject to adverse publicity related to REE’s potential customers who build vehicles on REE’s Powered by REE and/or REE’s SDV technology whether or not such publicity relates to such potential customers’ “Powered by REE TM ” vehicles.
If any of these risks materialize, our business, results of operations or financial condition could suffer, and the price of our Ordinary Shares could decline substantially. Summary Risk Factors Investing in our Class A Ordinary Shares involves a high degree of risk, as fully described below.
If any of these risks materialize, our business, results of operations or financial condition could suffer, and the price of our Ordinary Shares could decline substantially.
This approach depends in large part on REE’s ability to maintain existing agreements or enter into definitive agreements that formalize its relationship with customers, suppliers, dealers and strategic partners, as well as retaining and growing customer orders following trials of initial test fleets.
This approach depends in large part on REE’s ability to demonstrate that its products, including its X-By-Wire technology, is road-tested and road-ready and that it is certified for public roads under applicable regulatory standards to OEMs and to maintain existing agreements or enter into definitive agreements that formalize its relationship with customers, suppliers, Authorized Dealers and strategic partners, as well as retaining and growing customer orders following trials of initial test fleets, if and when such deliveries are made.
Market conditions, many of which are outside of REE’s control and subject to change, including general economic conditions, the availability and terms of financing, civil discourse throughout the globe, effects and impact of climate change and global warming, regulatory requirements and incentives, competition and the pace and extent of vehicle electrification generally, could impact demand for REE’s products and ultimately REE’s success.
These include general economic conditions, the availability and terms of financing, civil discourse throughout the globe, effects and impact of climate change and global warming, regulatory requirements and incentives, competition and the pace and extent of vehicle electrification.
In the event that actual results differ from REE’s projected financial information or if REE adjusts its projections in future periods, REE’s share price could be materially adversely affected. REE may not succeed in controlling the costs associated with its operations.
In addition to these risks, other unknown or unpredictable factors could also adversely affect REE’s financial or operating performance. In the event that actual results materially differ from REE’s projected financial information or if REE adjusts its projections in future periods, REE’s share price could be materially adversely affected.
If we are unsuccessful in generating orders for our products or are unable to raise additional capital, we may need to further reduce our expenses. If the market for commercial EVs does not develop as REE expects or develops slower than REE expects, its business prospects, financial condition, and operating results may be adversely affected.
If the market for SDVs does not develop as REE expects or develops slower than REE expects, its business prospects, financial condition, and operating results may be adversely affected.
In addition, REE’s plan to outsource manufacturing to suppliers and strategic partners and to utilize its current and future Integration Centers for the assembly of REE products is a novel business strategy and REE cannot guarantee that the strategy will be successful or profitable.
In addition, if and when REE resumes manufacturing in the future, its plan to outsource manufacturing to suppliers and strategic partners and to utilize its current and future Integration Centers for the assembly of REE products is a novel business strategy and REE cannot guarantee that the strategy will be successful or profitable, or that it will successfully control its costs through this structure, REE may be unable to generate sufficient revenues, raise additional capital or operate profitably or to meet projected gross margins, EBITDA and cash flows.
REE’s business and prospects are heavily dependent on its ability to develop, maintain and strengthen the “Powered by REE TM ” brand and the REE brand generally. If REE does not continue to establish, maintain and strengthen its brand, it may lose the opportunity to build a critical mass of customers.
REE’s business and prospects are heavily dependent on its ability to develop, maintain and strengthen the “Powered by REE TM ” brand and SDV technology products and the REE brand generally.
Nevertheless, the uncertain geopolitical conditions, sanctions, and other potential impacts on the global economic environment resulting from Russia’s invasion of Ukraine may impact customer behavior and disrupt the manufacturing, delivery and overall supply chain or our ability to commercialize REE’s products, which could make it difficult for REE to forecast its financial 14 Table of Contents results.
Moreover, although REE does not operate in Russia and Ukraine, and there are no plans to launch in either market in the near future,the ongoing conflict between Russia and Ukraine creates geopolitical uncertainty, increased sanctions, and other potential impacts on the global economic environment and may impact customer behavior and disrupt the manufacturing, delivery and overall supply chain or our ability to commercialize REE’s products, which could make it difficult for REE to forecast its financial results.
These risks include: • conforming REE’s products to various international regulatory requirements where its products are sold, or homologation; • development and construction of its future Integration Center network; • maintenance and ability to produce REE’s products in REE’s UK Integration Center; • difficulty in staffing and managing foreign operations; • difficulties securing customers in new jurisdictions; • foreign government taxes, regulations and permit requirements, including foreign taxes that REE may not be able to offset against taxes imposed upon it in Israel, and foreign tax and other laws limiting REE’s ability to repatriate funds to Israel; • fluctuations in foreign currency exchange rates and interest rates, including risks related to any interest rate swap or other hedging activities REE undertakes; • interruptions in shipments; • Israel and foreign government trade restrictions, tariffs and price or exchange controls; • foreign labor laws, regulations and restrictions; changes in diplomatic and trade relationships; • political instability, natural disasters, war or events of terrorism; and • the strength of international economies.
These risks include: • conforming REE’s products to various international regulatory, safety, emissions, certification and homologation requirements where its products are marketed or sold; • challenges related to the development, construction and operation of current and future Integration Centers; • difficulties related to maintenance and ability to produce REE’s products in REE’s UK Integration Center; 17 Table of C ontents • difficulty in staffing and managing foreign operations; • difficulties securing customers in new jurisdictions; • exposure to foreign government taxes, regulations and permit requirements, including foreign taxes that REE may not be able to offset against taxes imposed upon it in Israel, and foreign tax and other laws limiting REE’s ability to repatriate funds to Israel; • restrictions on the distribution of earnings, dividends, or capital from foreign jurisdictions to Israel; • exposure to fluctuations in foreign currency exchange rates and interest rates, including risks related to any interest rate swap or other hedging activities REE may undertake; • disruptions in global or regional supply chains and international shipping; • exposure to tariffs, trade restrictions, duties, or other governmental measures, including those that may be imposed by Israel or other foreign governments, or in response to changing trade policies, such as U.S. tariffs on imports from specified countries; • compliance with differing and potentially more stringent labor laws and employment regulations outside of Israel; • changing diplomatic, trade, and geopolitical relationships that may adversely impact REE’s ability to operate or sell in certain markets; • political instability, war, natural disasters, or terrorism in key markets; and • macroeconomic volatility or weakness in foreign markets, which could reduce demand for REE’s products.
While REE understands that its products do not have any “Tier 1” suppliers from Russia, vehicle production is a complex process, with thousands of components sourced from all over the world.
While REE’s “Tier 1” supplier contracts prohibit certain items sourced from sanctioned countries including Russia, vehicle production is a complex process, with thousands of components sourced from all over the world.
There can be no guarantee that any of REE’s strategic collaborations, suppliers or strategic partners will become customers and failure to do so would have a material adverse effect on REE’s business, prospects, financial results and results of operations. 15 Table of Contents REE’s ability to make additional sales following sales of test vehicles to customers depends in part on its ability to prove that REE’s products are to the full satisfaction of such customers and to establish and maintain confidence in REE’s business prospects among such customers and others within its industry.
There can be no guarantee that any such strategic collaborations, customers or strategic partners will transition from reservations to binding agreements and/or binding orders or become long-term commitments and the failure to do so would have a material adverse effect on REE’s business, prospects, financial results and results of operations.
Risks Related to Development and Production of REE’s Products REE’s products are in various stages of development and there are risks associated with developing existing advanced prototypes into marketable products. REE’s products are in various stages development. In order to reach the delivery stage REE’s products remain subject to further design, validation, verification and testing, as well as product homologation.
REE’s products are in various stages development. In order to reach the delivery stage REE’s products remain subject to further design, validation, verification and testing, as well as product homologation. There is no guarantee that REE will be successful in reaching the delivery stage on the projected timeline, or at all.
During February 2023, we took steps to lower our expenses through a targeted reduction in headcount of approximately 11% of the Company’s workforce.
Such circumstances would likely have a material adverse affect on our operations and business. 15 Table of C ontents In addition, over 2023 and 2024, we took steps to lower our expenses. Specifically, in 2023 we undertook a targeted reduction in headcount of approximately 11% of the Company’s workforce.
Furthermore, REE will also be exposed to risk associated with sharing its proprietary information with any such third party. REE operates in a highly competitive market against a large number of both established competitors and new market entrants, and many market participants have substantially greater resources than REE.
Furthermore, REE will also be exposed to risk associated with sharing its proprietary information with any such third party.
Further, REE cannot assure that the current governmental incentives and subsidies available for purchasers of EVs will remain available. Adverse conditions in the automotive industry could have adverse effects on REE’s results of operations. REE’s business is directly affected by and significantly dependent on business cycles and other factors affecting the global automobile industry.
REE’s business is directly affected by and significantly dependent on business cycles and other factors affecting the global automobile industry.
If REE does not develop and maintain a strong brand, its business, prospects, financial condition and operating results will be materially and adversely impacted. REE is subject to risks associated with strategic alliances.
Any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in the “Powered by REE TM ” brand and/or REE’s technology product and the REE brand generally. If REE does not develop and maintain a strong brand and/or technology products, its business, prospects, financial condition and operating results will be materially and adversely impacted.
Projecting REE’s operational or financial performance relies in large part upon assumptions and analyses that are inherently uncertain and subject to risk, and, that if proven incorrect could result in significantly lower actual results.
If any of this were to occur, it would damage our reputation, and negatively affect our operating results and likely result in the failure of our business. Projections of REE’s operational or financial performance relies in large part on inherently uncertain assumptions that may not materialize, which could cause actual results to differ significantly.
REE’s business depends in large part on its ability to develop, manufacture and assemble its products. Initially, REE plans to outsource the manufacturing of its products in collaboration with at least one supplier or strategic partner. REE plans to assemble its products at REE’s current and future Integration Centers.
If and when REE resumes manufacturing, REE plans to assemble its products at REE’s current and future Integration Centers.
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The principal factors and uncertainties that make investing in our Ordinary Shares risky, include, among others: • REE’s limited operating history may make evaluation of its business and future prospects difficult, increasing the risk of investment in REE. • Projecting REE’s operational or financial performance relies in large part upon assumptions and analyses that are inherently uncertain and subject to risk, and that if proven incorrect could result in significantly lower actual results. • REE may not succeed in controlling the costs associated with its operations. • If the market for commercial EVs does not develop as REE expects or develops slower than REE expects, its business prospects, financial condition, and operating results may be adversely affected. • Adverse conditions in the automotive industry could have adverse effects on REE’s results of operations. • REE’s business model has not been proven, and any failure to obtain significant orders for its products would have an adverse effect on its operating results, business, or reputation, resulting in substantial liabilities that may exceed its resources. • REE’s marketing and sales model may fail to achieve market success or acceptance, which may cause REE not to achieve profitability. 8 Table of Contents • REE’s agreements with potential customers, suppliers, dealers and strategic partners are preliminary in nature. • REE’s ability to make additional sales following sales of demo vehicles to customers depends in part on REE’s ability to prove that REE’s products are to the full satisfaction of such customers and to establish and maintain confidence in REE’s business prospects among such customers and others within its industry. • REE may not succeed in establishing, maintaining and strengthening the “Powered by REE TM ” brand. • REE is subject to risks associated with strategic alliances. • REE operates in a highly competitive market and may not be able to compete successfully in the market as a result of rapid changes in EV technology and the entrance of new and existing, larger manufacturers into the EV space. • REE is subject to risks associated with the anticipated timing of REE’s initial commercial production and subsequent increased commercial production. • REE’s development of an outsourced manufacturing business model may not be successful. • REE is reliant on its UK Engineering Center and REE’s Integration Center at Coventry, UK for the design, validation, verification, testing and homologation of its products. • REE will depend on its suppliers, and the inability of such suppliers to deliver the components of REE’s products in a timely manner or at all and at prices and volumes acceptable to it could have a material adverse effect on its business, prospects and operating results. • REE’s business could be harmed by increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells. • REE’s production targets are subject to a variety of risks, including the completion of REE’s production tooling investment plan, sourcing materials and components from its suppliers on its agreed upon deadlines and securing sufficient funding. • REE targets customers, some which are large corporations with substantial negotiating power, exacting product, quality and warranty standards and potentially competitive internal solutions. • Discontinuation, lack of commercial success, or loss of business with respect to a particular product model for which REE is a significant supplier could reduce REE’s sales and adversely affect its profitability. • Pricing pressures, automotive OEM cost reduction initiatives and the ability of automotive OEMs to re-source or cancel vehicle or technology programs may result in lower than anticipated margins, or losses, which may adversely affect REE’s business. • REE may become subject to product liability claims. • REE does not currently have extensive experience servicing its products. • REE may be subject to risks associated with autonomous driving and EV technology. • REE is dependent on its founders Daniel Barel and Ahishay Sardes. 9 Table of Contents • REE’s success depends, in part, on its ability to attract and recruit key employees and hire qualified employees and management. • Financial results may vary significantly from period to period due to fluctuations in REE’s operating costs and other factors, which may or may not be foreseeable. • REE will need to improve its operational and financial systems to support its expected growth. • REE expects that it will need to raise additional funds. • REE may not be able to continue as a going concern based on REE’s business plan to start mass production in late 2024 and early 2025 if REE is unable to obtain sufficient additional funding or does not have access to capital to finance its current business plan, and REE may be forced to change its business plan as a result. • REE’s financial and operational projections rely in part on existing and future regulations and incentive programs supporting EV adoption. • REE may encounter obstacles outside of its control that slow the adoption of EVs in the market, including but not limited to regulatory requirements or infrastructure limitations. • REE is subject to various environmental laws and regulations that could impose substantial costs on its business and cause delays in building its manufacturing facilities. • REE may become involved in legal and regulatory proceedings and commercial or contractual disputes. • REE’s management has limited experience operating a public company, and thus its success in such endeavors cannot be guaranteed. • If REE is unable for any reason to meet the continued listing requirements of Nasdaq, such action or inaction could result in a delisting of the Class A Ordinary Shares. • REE is subject to cybersecurity risks to its various systems and software, and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent REE from effectively operating its business or may cause harm to its business that may or may not be reparable. • REE may incur significant costs and expenses in connection with the protection and enforcement of its intellectual property rights, including but not limited to litigation costs. • Lawsuits alleging infringement or misappropriation of intellectual property rights of third parties could be both costly and time consuming and could prevent REE from developing or commercializing its future products. • The dual class structure of our Ordinary Shares has the effect of concentrating voting power. • Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them, may affect REE’s operations. 10 Table of Contents Risks Related to REE’s Business REE’s limited operating history may make evaluation of its business and future prospects difficult, increasing the risk of investment in REE.
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Summary Risk Factors Investing in our Class A ordinary shares, no par value per share, having one vote per share, or Class A Ordinary Shares, involves a high degree of risk, as fully described below.
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There can be no assurance that customers and potential customers will purchase REE’s automotive products at any level or at a level that is profitable for REE.
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The principal factors and uncertainties that make investing in our Class A Ordinary Shares risky, include, among others: • REE is an early stage company with a history of losses, and expects to incur significant expenses and continuing losses for the foreseeable future, and there is substantial doubt that we will have sufficient funds to satisfy our obligations for the foreseeable future and through the next 12 months from the date of this Annual Report if we are unable to obtain sufficient additional funding or do not have access to capital to finance our current business plan. • Servicing our Convertible Notes may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
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Other unknown or unpredictable factors could also adversely impact REE’s financial or operating performance, and REE undertakes no obligation to update or revise any projections, whether as a result of new information, future events, or otherwise.
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Additionally, we may not have the funds necessary to settle conversions of our convertible notes in cash or to repurchase the notes upon a change in control transaction, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the notes. • REE’s limited operating history may make evaluation of its business and future prospects difficult, increasing the risk of investment in REE.
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To date, the adjustments that we have made to our headcount have had a limited impact on our overall business plan and we are able to continue our focus on producing mission-specific Class 1 through Class 6 EVs, focusing primarily on Class 3 through 5 platform models on the P7 EV platform.
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Its business model has not been proven, and any failure to obtain significant orders for its products would have an adverse effect on its operating results, business, or reputation, resulting in substantial liabilities that may exceed its resources. • Projections of REE’s operational or financial performance relies in large part on inherently uncertain assumptions that may not materialize, which could cause actual results to differ significantly .
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The volume of global automotive production has fluctuated, sometimes significantly, from year to year, and REE expects any such fluctuations to give rise to fluctuations in the demand for its products.
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We also operate in an industry that is new and rapidly evolving, and our estimates are subject to significant uncertainty. • Our significant shareholders have influence and may be able to exert substantial influence over REE, including over decisions that require the approval of shareholders, and their interests may conflict with the interests of other shareholders, which could materially adversely impact REE. 8 Table of C ontents • If the market for SDVs does not develop as REE expects or develops slower than REE expects, its business prospects, financial condition, and operating results may be adversely affected. • REE’s future sales and operations in international markets may expose it to operational, financial and regulatory risks, including unfavorable regulatory, political, tax and labor conditions, which could negatively impact us. • Adverse conditions in the automotive industry and adverse global conditions, including macroeconomic, protectionist trade policies and tariffs, geopolitical uncertainty, and other events may negatively impact our financial results and/or operations.
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Risk Factors – Risks Related to REE’s Incorporation and Location in Israel – Political, economic and military conditions in Israel could adversely affect REE’s business; REE conducts certain operations in Israel.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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History and development of the company REE Automotive Ltd. was incorporated on January 16, 2011, as a company limited by shares under the laws of the State of Israel. We are registered under the Israeli Companies Law and registered with the Israeli Registrar of Companies under registration number 51-455733-9.
Item 4. Information on the Company A. History and development of the company REE Automotive Ltd. was incorporated on January 16, 2011, as a company limited by shares under the laws of the State of Israel. We are registered under the Israeli Companies Law and registered with the Israeli Registrar of Companies under registration number 51-455733-9.
Our website is www.ree.auto which we use as a channel of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.
Investors and others should note that we may announce business and financial information to our investors using our website www.ree.auto, our SEC Filings, webcasts, press releases, and public conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues.
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Item 4.B. Business Overview — REE’s Manufacturing Approach ” for more information.
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It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.
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If REE is unable to negotiate and finalize all of such definitive agreements it will not be able to produce any products and will not be able to generate any revenue, or the products may become more expensive to deliver with a higher bill of materials, which would have a material adverse effect on its business, prospects, operating results and financial condition.
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In addition, the utilization of future Integration Centers for the assembly of REE products is an untested business strategy and there is no guarantee that the strategy will be successful or profitable.
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If REE’s suppliers and strategic partners were to experience delays, disruptions, capacity constraints or quality control problems in their manufacturing operations, product shipments could be delayed or rejected or REE’s potential customers and dealers could consequently elect to change product demand. These disruptions would negatively impact REE’s revenues, competitive position and reputation.
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In addition, REE’s suppliers and strategic partners may rely on certain state tax incentives that may be subject to change or eliminated in the future, which could result in additional costs and delays in production.
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Further, if REE is unable to successfully manage its relationship with its suppliers and strategic partners, the quality and availability of its products may be harmed. REE’s suppliers, dealers and strategic partners could, under some circumstances, decline to accept new purchase orders from or otherwise reduce their business with REE.
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If REE’s suppliers and strategic partners stopped manufacturing REE’s products for any reason or reduced manufacturing capacity, REE may be unable to replace the lost manufacturing capacity on a timely and comparatively cost-effective basis, which would adversely impact its operations.
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REE’s reliance on its suppliers and strategic partners, as well as the establishment and operation of REE’s current and future Integration Centers, exposes it to a number of risks that are outside its control, including: • the manufacture of certain components that will require significant costs related to non-recurring engineering and tooling costs incurred by REE’s suppliers and strategic partners the extent of which is currently unknown; • its inability to control manufacturing yield and unexpected increases in manufacturing costs; • interruptions in shipments if a suppliers or strategic partners are unable to complete production in a timely manner; • its inability to control quality of finished products; • its inability to control delivery schedules; • its inability to control production levels and to meet minimum volume commitments to REE’s potential customer base; • its inability to maintain adequate manufacturing capacity; • its inability to secure adequate volumes of acceptable components at suitable prices or in a timely manner; 18 Table of Contents • its inability to establish new Integration Centers at the projected cost of $15 million to $30 million (based on whether such Integration Center is only producing REEcorners™ or is also producing the REEplatform TM ) per Integration Center or due to lack of market demands; • inability to accurately assemble products within specified design tolerances; • delays by REE in delivering final component designs to its suppliers and strategic partners; • its inability to implement a sufficient number of future Integration Centers in order to meet demand for REE products in time; • inability to implement a network of future integration; • inability to effectively manage a global network of Integration Centers; and • other delays, backlog in manufacturing and research and development of new models, and cost overruns.
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REE’s ability to develop, manufacture and obtain required regulatory approvals for products of sufficient quality and appeal to its current and potential customer base on schedule and on a large scale is unproven, and the business plan is still evolving. REE may be required to introduce new products models and enhanced versions of existing models.
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To date, REE has limited experience, as a company, designing, testing, manufacturing, marketing and selling or leasing its electric products and therefore cannot assure you that it will be able to meet customer expectations.
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Any failure to develop such manufacturing processes and capabilities within REE’s projected costs and timelines would have a material adverse effect on its business, prospects, operating results and financial condition.
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REE does not currently have any plans to establish manufacturing facilities of its own, so failure to establish sufficient agreements with suppliers and strategic partners would significantly hinder REE’s ability to manufacture its products.
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In addition, the manufacturing facilities of REE’s potential and strategic partners may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, flooding, fire and power outages, or by health epidemics, such as the recent COVID-19 pandemic, which may render it difficult or impossible for REE to manufacture its products for some period of time.
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The inability to manufacture REE’s products or the backlog that could develop if the manufacturing facilities of its suppliers and strategic partners are inoperable for even a short period of time may result in the loss of potential customers or harm REE’s reputation.
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REE is reliant on its UK Engineering Center and REE’s UK Integration Center in Coventry, UK for the design, validation, verification, testing and homologation of its products. In 2022, REE built its first UK Integration Center and highly automated launch factory in Coventry, United Kingdom.
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The new UK Integration Center and the existing UK Engineering Center, which are strategically located next to each other, are intended to expedite REE’s strategic plans to meet anticipated global demand. The UK Engineering Center is spearheading REE product design, validation, verification and testing, as well as product homologation.
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REE also has access to world-class test facilities and a proving ground for physical testing and validation of the REE products at the UK Integration Center and the UK Engineering Center. The UK Integration Center, alongside the UK Engineering Center, and the facilities available therein, are integral to REE’s ability to develop its products.
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Any loss of access or disputes related to the UK Integration Center or the UK Engineering Center have the potential to adversely impact REE’s ability to develop its products on time to meet commercialization timeline, or at all.
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REE’s utilization of its UK Integration Center and the UK Engineering Center are and will be subject to risks, including with respect to: • REE’s ability to maintain arrangements on reasonable terms with third parties for the provision of testing facilities and testing services with respect to REE products; • REE’s ability to attract, recruit, hire, retain and train a sufficient number of skilled employees to effectively staff the UK Integration Center and the UK Engineering Center; and • REE’s reliance on outside contractors for the provision of certain services and associated risks related to monitoring and protecting IP, contractual disputes and certain inherent cybersecurity risks.
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The testing facilities may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, flooding, fire and power outages, or by health epidemics, such as the recent COVID-19 pandemic, which may render it difficult or impossible for REE to validate, verify and test REE products for some period of time.
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The inability to validate, verify and test REE products or the resulting delay to REE’s commercialization schedule if the testing facilities are inoperable for even a short period of time may result in the loss of potential customers or harm REE’s reputation. 19 Table of Contents REE’s products will make use of lithium-ion battery cells, which can be dangerous in certain circumstances, including but not limited to the possibility that such cells may catch fire or vent smoke and flame.
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The fuel source for REE products will make use of lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells.
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While REE has taken measures to enhance the safety of its designs, a field or testing failure of its products could occur in the future, which could subject REE to lawsuits, product recalls, or redesign efforts, all of which would be time-consuming and expensive.
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Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications or any future incident involving lithium-ion cells such as a vehicle or other fire, even if such incident does not involve REE’s products, could seriously harm its business.
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In addition, REE’s suppliers and strategic partners are expected to store a significant number of lithium-ion cells at their facilities. Any mishandling of battery cells may cause disruption to the operation of such facilities. A safety issue or fire related to the cells could disrupt operations or cause manufacturing delays.
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Such damage or injury could lead to adverse publicity and potentially a safety recall. Moreover, any failure of a competitor’s EV or energy storage product may cause indirect adverse publicity for REE and its products. Such adverse publicity could negatively affect REE’s brand and harm its business, prospects, financial condition and operating results.
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The efficiency of battery usage in EVs declines over time, which may negatively impact potential customers’ decisions with regards to purchasing REE’s products. REE anticipates that the range of its products will decline over time as the batteries deteriorate.
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Other factors such as usage, time and stress patterns may also impact the battery’s ability to hold a charge, which would decrease REE’s products’ range before needing to refuel. Such battery deterioration and the related decrease in range may negatively influence potential customer decisions, which would negatively affect REE’s operating results and financial condition.
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Risks Related to REE’s Suppliers REE depends on its suppliers, including but not limited to body manufacturers and battery providers, some of which will be single or limited source suppliers, and the inability of such suppliers to deliver the components of REE’s products in a timely manner or at all and at prices and volumes acceptable to it could have a material adverse effect on its business, prospects and operating results.
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REE relies on suppliers and strategic partners for the provision and development of many of the components and materials used in its products. While REE plans to obtain components from multiple suppliers and strategic partners whenever possible, some of the components used in its products may be purchased by REE from a single source.
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REE’s suppliers and strategic partners may not be able to meet their product specifications and performance characteristics, which would impact REE’s ability to achieve its product specifications and performance characteristics as well.
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Additionally, REE’s suppliers and strategic partners may be unable to obtain required certifications for their products for which REE plans to use or provide warranties that are necessary for REE’s solutions.
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If REE is unable to obtain components and materials used in its products from its suppliers or if its suppliers decide to create or supply a competing product, REE’s business could be adversely affected. REE has less negotiating leverage with suppliers than larger and more established automobile manufacturers and may not be able to obtain favorable pricing and other terms.
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While REE believes that it may be able to establish alternate supply relationships and can obtain or engineer replacement components for its single source components, REE may be unable to do so in the short term, or at all, at prices or quality levels that are favorable to REE, which could have a material adverse effect on its business, prospects, financial condition and operating results.
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REE expects to purchase various types of equipment, raw materials and manufactured component parts from its suppliers or strategic partners.
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If these suppliers or strategic partners experience substantial financial difficulties, cease operations, or otherwise face business disruptions, REE may be required to provide substantial financial support to ensure supply continuity or would have to take other measures to ensure components and materials remain available.
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Any disruption could affect’s REE’s ability to deliver products and could increase REE’s costs and negatively affect its liquidity and financial performance. 20 Table of Contents REE’s business could be harmed by increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells.
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REE and its suppliers may experience increases in the cost of or a sustained interruption in the supply or shortage of commodities, raw materials and other inputs used by REE and its suppliers in their businesses and products, such as steel, lithium-ion battery cells and semiconductors, which could adversely affect REE’s future profitability or REE’s ability to timely execute its business plan.
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The prices for these materials fluctuate and the available supply of these materials may be unstable, depending on market conditions, fluctuations in global demand, including as a result of increased production of EVs by REE’s competitors, geopolitical risk and other economic and political factors.
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In particular, a global semiconductor supply shortage has had, and is continuing to have, wide-ranging effects across multiple industries, particularly the automotive industry. Any such increase, supply interruption or shortage could materially and negatively impact REE’s business, prospects, financial condition and operating results. REE’s production plan is focused on scaling up production in two phases.
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Phase 1 of the production plan relates to producing low hundreds of vehicles in the U.S. with targeting Bill of Material, or BOM, break even, and phase 2 of the production plan relates to producing low thousands of vehicles in the following year after completion of phase 1 .
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Such target is subject to a variety of risks, including the completion of REE’s production tooling investment plan, sourcing materials and components from REE’s suppliers on its agreed upon deadlines and securing sufficient funding. REE’s business plan includes scaling up the production of low hundreds of trucks in the U.S.
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(phase 1) and low thousands in the following year after completion of phase 1. However, this production plan relies on our ability to complete REE’s production tooling investment plan, securing materials from REE’s suppliers on its agreed upon deadlines and securing funding primarily for working capital purposes.
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If REE is unable to complete its production tooling investment plan, or if its suppliers face delays in delivering materials to REE from its expected timelines, REE may not meet its production plan timing.
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In addition, REE’s production plan relies on its ability to finance the required working capital needs by raising sufficient funds therefore, if REE is unable to secure sufficient funding, REE may not meet our production targets. Not meeting its 2024 or 2025 production targets could materially and negatively impact REE’s business, prospects, financial condition and operating results.
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Risks Related to REE’s Future Sales REE targets customers, some of which are large corporations with substantial negotiating power, exacting product, quality and warranty standards and potentially competitive internal solutions.
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Many of REE’s existing and potential customers are large, multinational corporations with substantial negotiating power relative to it and, in some instances, may have internal solutions that are competitive to REE’s products. These large, multinational corporations also have significant development resources that may allow them to acquire or develop independently, or in partnership with others, competitive technologies.
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Meeting the technical requirements and securing design wins with any of these companies will require a substantial investment of REE’s time and resources. REE cannot assure you that its products will secure design wins from these or other companies or that it will generate meaningful revenue from the sales of its products to these key customers.
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If REE’s products are not selected by these large corporations or if these corporations develop or acquire competitive technology, it will have an adverse effect on REE’s business. In addition, if REE is unable to sell its products to such customers on certain terms, its prospects and results of operations may be adversely affected.
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Discontinuation, lack of commercial success, or loss of business with respect to a particular product model for which REE is a significant supplier could reduce REE’s sales and adversely affect its profitability. If REE is able to secure design wins and its products are included in EV products, it expects to enter into supply agreements with the relevant customers.
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Market practice dictates that these supply agreements typically require REE to supply a customer’s requirements for a particular vehicle model or product. These contracts can have short terms and/or can be subject to renegotiation, sometimes as frequently as annually, all of which may affect product pricing, and may be terminated by REE’s potential customers at any time.
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Therefore, even if REE is successful in obtaining design wins and the systems into which its products are integrated are commercialized, the discontinuation of, the loss of business with respect to, or a lack of commercial success of a particular vehicle model for which REE is a significant supplier could mean that the expected sales of REE’s products will not materialize, which may materially and adversely affecting its business. 21 Table of Contents Pricing pressures, automotive OEM cost reduction initiatives and the ability of automotive OEMs to re-source or cancel vehicle or technology programs may result in lower than anticipated margins, or losses, which may adversely affect REE’s business.
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Cost-cutting initiatives adopted by REE’s customer base often result in increased downward pressure on pricing. REE expects that its future agreements with automotive OEMs may require step-downs in pricing over the term of the agreement or, if commercialized, over the period of production.
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In addition, REE’s automotive OEM customers are expected to reserve the right to terminate their supply contracts for convenience, which enhances their ability to obtain price reductions. Automotive OEMs also possess significant leverage over their suppliers, including REE, because the automotive component supply industry is highly competitive, serves a limited number of customers and has a high fixed cost base.
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Accordingly, REE expects to be subject to substantial continuing pressure from automotive OEMs and Tier 1 suppliers to reduce the price of its products. It is possible that pricing pressures beyond REE’s expectations could intensify as automotive OEMs pursue restructuring, consolidation and cost-cutting initiatives.
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If REE is unable to generate sufficient production cost savings in the future to offset price reductions, its gross margin and profitability would be adversely affected. The average selling prices of REE’s products could decrease rapidly over the life of the products, which may negatively affect REE’s revenue and gross margin.
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REE expects the average selling prices of its products generally to decline as its customer base seeks to commercialize EVs built on the REE products at prices low enough to achieve market acceptance.
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In order to sell products that have a falling average unit selling price and maintain margins at the same time, REE will need to continually reduce products and manufacturing costs. To manage manufacturing costs, REE must engineer the most cost-effective design for its products.
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In addition, REE will continuously promote initiatives to reduce labor cost, improve worker efficiency, reduce the cost of materials, use fewer materials and further lower overall product costs by carefully managing component prices, inventory and shipping cost. REE also needs to continually introduce new products with higher sales prices and gross margin in order to maintain its overall gross margin.
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If REE is unable to manage the cost of older products or successfully introduce new products with higher gross margin, its revenue and overall gross margin would likely decline.
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Risks Related to REE’s Quality REE’s products rely on software and hardware that is highly technical, and if these systems contain errors, bugs or vulnerabilities, or if REE is unsuccessful in addressing or mitigating technical limitations in its systems, REE’s business could be adversely affected.
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REE’s products rely on software and hardware that is highly technical and complex that will require modification and updates over the life of the products. In addition, REE’s products depend on the ability of such software and hardware to store, retrieve, process and manage large amounts of data.
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REE’s software and hardware may contain, errors, bugs or vulnerabilities, and REE’s systems are subject to certain technical limitations that may compromise REE’s ability to meet its objectives. Some errors, bugs or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use.
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Errors, bugs, vulnerabilities, design defects or technical limitations may be found within REE’s software and hardware. Although REE attempts to remedy any issues it observes in its products as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not be to the satisfaction of REE’s potential customer base.
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Additionally, if REE is able to deploy updates to the software addressing certain issues and REE’s over-the-air update procedures fail to properly update the software, REE’s customer base would then be responsible for installing such updates to the software and their software will be subject to these vulnerabilities until they do so.
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If REE is unable to prevent or effectively remedy errors, bugs, vulnerabilities or defects in its software and hardware, REE may suffer damage to its reputation, loss of customers, loss of revenue or liability for damages, any of which could adversely affect REE’s business and financial results.
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REE may become subject to product liability claims, which could harm its financial condition and liquidity if it is not able to successfully defend or insure against such claims. REE may become subject to product liability claims, even those without merit, which could harm its business reputation, prospects, operating results, and financial condition.
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The automobile industry experiences significant product liability claims and REE faces inherent risk of exposure to claims in the event its products do not perform as expected or malfunction in a manner that causes personal injury or death. REE’s risks in this area are particularly pronounced given it has limited field experience with its products.
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A successful product liability claim against REE could require REE to pay a 22 Table of Contents substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about REE’s products and business and inhibit or prevent commercialization of other future product, which would have a material adverse effect on REE’s brand, business, prospects and operating results.
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To the extent that REE has insurance coverage, it might not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of REE’s coverage, or outside of REE’s coverage, may have a material adverse effect on REE’s reputation, business and financial condition.
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REE may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if it does face liability for its products and is forced to make a claim under its policy. REE does not currently have extensive experience servicing its products.
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If REE is unable to address the service requirement of its potential customer and dealer base, its business may be materially adversely affected.
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REE plans to work with strategic partners to provide predictive maintenance scheduling through smart service and maintenance artificial intelligence, or AI, in combination with over-the-air updates that seek to ensure maintenance is not performed on a standard schedule, but rather before a part will fail, which is expected to offer significant savings for unnecessary part replacements and drastically reduce downtime.
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There is no guarantee that REE will be successful in developing the necessary technology to actualize predictive maintenance scheduling. In addition, REE servicing may primarily be carried out through third parties certified by REE. Although such potential servicing partners may have experience in servicing other products, they will initially have limited experience in servicing REE products.
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There can be no assurance that REE service arrangements will adequately address the service requirements of its potential customer and dealer base to their satisfaction, or that REE and its potential servicing partners will have sufficient resources to meet these service requirements in a timely manner as the volume of products REE deliver increases.
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In addition, if REE is unable to roll out and establish a widespread service network that complies with applicable laws, user satisfaction could be adversely affected, which in turn could materially and adversely affect REE’s reputation, sales, results of operations, and prospects.
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REE may be subject to risks associated with autonomous driving and EV technology, including but not limited to technical malfunctions, regulatory obstacles, and/or product liability. REE’s products are being designed to be compatible with autonomous control. Autonomous driving technologies are subject to risks and there have been accidents and fatalities associated with such technologies.

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While this vehicle format is familiar, it is subject to an inherent limitation with respect to compartment space, vehicle function, maintenance and modularity. We believe that ICE vehicles and EV manufacturers employ a correspondingly similar strategy to development of new vehicle platforms: vehicle functionality is determined by the OEM mindset trying to forecast and influence future market trends.
While this vehicle format is familiar, it is subject to an inherent limitation with respect to compartment space, vehicle function, maintenance and modularity. We believe that ICE vehicles and EV manufacturers employ a correspondingly similar strategy to the development of new vehicle platforms: vehicle functionality is determined by the OEM mindset trying to forecast and influence future market trends.
Our track record of invention and early development of our products has afforded us many years to innovate across hardware and software, which we believe has created substantial advantages in its targeted markets as a result of its industry know-how and proprietary trade secrets.
Our track record of invention and early development of our products has afforded us many years to innovate across hardware and software, which we believe has created substantial advantages in our targeted markets as a result of our industry know-how and proprietary trade secrets.
The facility is approximately 130,000 square feet (approximately 12,077 square meters), under a lease agreement that expires in 2032. REE utilizes this facility for engineering, process validation activities, along with product assembly operations. 2. REE’s operates a testing facility in MIRA Technology Park in the UK for an approximately 4,693 square foot (436 square meter) facility.
The facility is approximately 130,000 square feet (approximately 12,077 square meters), under a lease agreement that expires in 2032. REE utilizes this facility for engineering, process validation activities, along with product assembly operations. 2. REE operates a testing facility in MIRA Technology Park in the UK for an approximately 4,693 square foot (436 square meters) facility.
In addition, we have the following facilities that we consider to be material as well as certain immaterial facilities: 1. In February 2022, REE entered into a lease agreement for its UK Engineering Centre and Launch Factory, which is located in Coventry, UK.
In addition, we have the following facilities that we consider to be material as well as certain immaterial facilities: 1. In February 2022, REE entered into a lease agreement for its UK Engineering Center and Launch Factory, which is located in Coventry, UK.
The typical format of the ICE vehicle has become ubiquitous and consists of an engine positioned between the front or back wheels, with most other critical vehicle systems such as steering, braking, suspension, powertrain and control likewise located centrally between the vehicle wheels. Most EVs in the market locate these components similarly.
The typical format of the ICE vehicle consists of an engine positioned between the front or back wheels, with most other critical vehicle systems such as steering, braking, suspension, powertrain and control likewise located centrally between the vehicle wheels. Most EVs in the market locate these components similarly.
REEcorners were designed for ease of manufacture, and we benefit from our capex light strategy through our fully commissioned production line located in Coventry, UK. This product line has thirteen robotic stations, is run by only seven operators, and has production capacity of 40,000 REEcorners (10,000 vehicles) annually based on a single shift per day.
REEcorners® were designed for ease of manufacture, and we benefit from our capex-light strategy through our fully commissioned production line. This product line has thirteen robotic stations, is run by only seven operators, and has production capacity of 40,000 REEcorners® (10,000 vehicles) annually based on a single shift per day.
We rely upon a combination of protections afforded to owners of patents, designs, copyrights, trade secrets, and trademarks, along with employee and third-party non-disclosure agreements and other contractual restrictions to establish and protect REE’s intellectual property rights.
We rely upon a combination of protections afforded to owners of patents, designs, copyrights, trade secrets, and trademarks, along with employee and third-party nondisclosure agreements and other contractual restrictions to establish and protect REE’s intellectual property rights.
We regularly review our development efforts to assess the existence and patentability of new inventions, and we are prepared to file additional patent applications when we determine it would benefit our business to do so. Trademarks and Service Marks We pursue global registration of our domain names and products and services trademarks.
We regularly review our development efforts to assess the existence and patentability of new inventions, and we are prepared to file additional patent applications when we determine it would benefit our business to do so. 65 Table of C ontents Trademarks and Service Marks We pursue global registration of our domain names and products and services trademarks.
The shift in consumer preference is attributable to consumers’ rising environmental consciousness and increased awareness of the impact of global climate change, improvement in battery technology, the continuing build-out of electric charging infrastructure, increased offerings from automotive manufacturers that are better aligned with consumer demand and the growing comfort with EV range capabilities that is easing “range anxiety” and facilitating adoption.
The shift in consumer preference is attributable to consumers’ environmental consciousness and increased awareness of the impact of global climate change, improvement in battery technology, the continuing build-out of electric charging infrastructure, increased offerings from automotive manufacturers that cater to this consumer demand and the growing comfort with EV range capabilities that is easing “range anxiety” and facilitating adoption.
In addition, we have families of design patents registered globally. Our patent applications are directed to, among other things, EV products, component systems and enhanced product manufacturability, for example, corner modules, flat chassis, electrical and control systems, brake systems, wheel assemblies, and testing.
In addition, we have five (5) families of design patents registered globally. Our patent applications are directed to, among other things, EV products, component systems, x-by-wire and enhanced product manufacturability, for example, corner modules, flat chassis, electrical and control systems, brake and steering systems, wheel assemblies, and testing.
We pursue patent protection when we develop a patentable invention and the benefits of obtaining a patent outweigh the risks of making the invention public through patent filings. Patents As of December 31, 2023, we had approximately 176 pending and registered patents in the U.S. and globally, of which approximately 57 are granted utility patents.
We pursue patent protection when we develop a patentable invention and the benefits of obtaining a patent outweigh the risks of making the invention public through patent filings. Patents As of December 31, 2024, we had approximately 188 pending and registered patents in the U.S. and globally, of which approximately 80 are granted utility patents.
We expect that our X-By-Wire control technology will enable lower TCO through expedient REEcorner TM replacement, referred to as the Quick REEcorner swap, smart preventative maintenance and over-the-air updates, and improved residual value per truck given our efforts to future proof each vehicle through, among other capabilities, autonomous driving ready capabilities.
We expect that our X-by-Wire control technology will enable lower TCO through expedient REEcorner ® replacement, referred to as the Quick REEcorner® swap, smart preventative maintenance and over-the-air updates, and improved residual value per truck given our efforts to future proof each vehicle through, among other capabilities, autonomous driving ready capabilities and the ability to receive new software, and software updates as they become available.
The battery modules on Powered by REE vehicles conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries, which may present a risk in transportation.
The battery modules on our P7 vehicles conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries, which may present a risk in transportation.
We believe our products will strongly compete based on these factors. Environmental, Social and Governance (ESG) Practices As an automotive technology company with a vision to become the cornerstone of tomorrow’s zero-emission EVs, we are committed to operating in an ethical and sustainable manner while maximizing our ability to positively impact our environment and society.
Environmental, Social and Governance (ESG) Practices As an automotive technology company with a vision to become the cornerstone of tomorrow’s zero-emission EVs, we are committed to operating in an ethical and sustainable manner while maximizing our ability to positively impact our environment and society.
These changes could impact the rollout of new features in Europe. Similarly, as a global company deploying cutting-edge technology, we are also subject to trade, export controls, customs product classification and sourcing regulations. Our operations also are subject to various federal, state and local laws and regulations governing the occupational health and safety of our employees and wage regulations.
Similarly, as a global company deploying cutting-edge technology, we are also subject to trade, export controls, customs product classification and sourcing regulations. Our operations also are subject to various federal, state and local laws and regulations governing the occupational health and safety of our employees and wage regulations.
We have designed a fully flat EV platform, purposefully engineered with a goal of maximum space efficiency and modularity to support a wide range of vehicle applications in the business-to-business, or B2B, market.
Furthermore, we have designed a fully flat EV platform reliant upon our SDV technology, purposefully engineered with the goal of maximum space efficiency and modularity to support a wide range of vehicle applications in the business-to-business (B2B) market.
REEcorner™ - Our revolutionary, award-winning REEcorner™ is a compact module that integrates critical vehicle drive components (steering, braking, suspension, powertrain and control) into the area between the chassis and the wheel. Each REEcorner™ is an independent assembly controlled by its own ECU, which controls corner level functions.
REEcorners ® : Our revolutionary REEcorner® is a compact single module that integrates critical vehicle drive components (steering, braking, suspension, powertrain and control) into the area between the chassis and the wheel. Each REEcorner® is an independent assembly that is capable of being controlled by an independent ECU, which controls corner level functions.
Our research and development efforts have resulted in a strong intellectual property portfolio, and we have filed for patent protection for several of our key inventions across key markets of the world, resulting in, as of December 31, 2023, approximately 176 active or pending patent applications for EV products, component systems, testing and enhanced product manufacturability, of which approximately 57 are granted patents and 119 pending applications.
Our research and development efforts have resulted in a strong intellectual property portfolio, and we have filed for patent protection for several of our key inventions across key markets of the world , resulting in, as of December 31, 2024, approximately 188 active or pending patent applications for SDV products, component systems, X-by-Wire, testing and enhanced product manufacturability, of which approximately 80 are granted patents.
As of December 31, 2023, we successfully registered trademarks for “REE” and “R3E” in 13 jurisdictions and also have trademarks for “REEcorner” and “Powered by REE” pending or registered globally. Government Regulation 52 Table of Contents Some of our products are subject to, and we are required to comply with, the U.S.
As of December 31, 2024, we successfully registered trademarks for “REE” and “R3E” logo in approximately thirteen (13) jurisdictions and also have trademarks for “REEcorner” and “Powered by REE” registered and pending globally. Government Regulation Laws in the U.S. Certain of our products are subject to, and we are required to comply with, the U.S.
We plan to provide REEcorner™ technology and Powered by REE™ EV platforms on top of which companies can then build their ideal vehicles customized to their specific requirements based on our disruptive tech. Additionally, we aim to provide complete commercial EVs through partnerships with industry-leading companies, OEMs and top-hat upfitters.
REE’s Go-To-Market Strategy Go to Market Strategy We plan to provide our SDV technology, including REEcorner™ technology and Powered by REE™ platforms on top of which companies can then build their ideal vehicles customized to their specific requirements. Additionally, we aim to provide complete commercial EVs through partnerships with our ADNs, OEMs and top-hat upfitters.
Partnerships with bodybuilders for P7-C are aimed to ensure that full-vehicle solutions for box trucks, service bodies, platform bodies and more can be offered to fleets by dealers. 5.
Partnerships with bodybuilders such as The Knapheide Manufacturing Company, or Knapheide, and Wabash Parts and Services for P7-C are aimed to ensure that full-vehicle solutions for box trucks, service bodies, platform bodies and more can be offered to fleets by dealers.
Subsequent to year end, we were selected by, and delivered a prototype vehicle to, Airbus UpNext, a wholly owned innovation subsidiary of Airbus SE, to provide technological know-how based upon the REEcorner and full-by-wire control systems.
Initiating Autonomous Driving (AD) Programs with Airbus In March 2024, we were selected by, and delivered a prototype vehicle to Airbus UpNext, a wholly-owned innovation subsidiary of Airbus SE, or Airbus, to provide technological know-how based upon the REEcorner® and full-by-wire control systems.
REE utilizes this facility for product engineering design, validation, verification and testing, as well as product homologation. REE’s lease for this facility expires in April 2025 and REE has no plans to extend the term of such lease. 3. In March 2022, REE entered into a lease agreement for its Austin, Texas headquarters.
REE utilizes this facility for product engineering design, validation, verification and testing, as well as product homologation. REE’s lease for this facility expired in April 2025, which, as of the date of this Annual Report has not been extended. 3. In March 2022, REE entered into a lease agreement for its Austin, Texas headquarters.
As of March 25, 2024 our Authorized Dealer Network consists of, among other dealers: Pritchard EV, Tom's Truck Center, Industrial Power & Truck Equipment, New England Truck Solutions, FMI Truck Sales & Services The Truck Shop, Monarch Truck Center, Ry-Den Truck Center, Jim Reed’s Truck Sales, Inc., Fleet Direct Sales, Specialty Vehicles & Equipment Ltd., McCandless Truck Centers, Lynch Truck Centers, C&M Motors, Inc., Midwest Transit Equipment, LLC, XPO Auto Sales, Inc. and Harris Auto Group (BC).
As of the date of this Annual Report, we had built an ADN that consists of, among other dealers: Pritchard EV, Tom's Truck Center, Industrial Power & Truck Equipment, New England Truck Solutions, FMI Truck Sales & Services The Truck Shop, Monarch Truck Center, Ry-Den Truck Center, Jim Reed’s Truck Sales, Inc., Fleet Direct Sales, Specialty Vehicles & Equipment Ltd., McCandless Truck Centers, Lynch Truck Centers, Midwest Transit Equipment, LLC, XPO Auto Sales, Inc. and Harris Auto Group (BC ).
As many traditional and new players enter the EV market, we believe the primary competitive factors in the EV market will revolve around, but not be limited to, the following key differentiation factors: • technological innovation; • product quality and reliability; • safety features; • market adoption; • service options; • product performance; • design and styling; • product price; and • manufacturing efficiency.
We believe the primary competitive factors in our market will revolve around, but not be limited to, the following key differentiation factors: • Technological innovation; • Product quality and reliability; • Safety features; • Market adoption; • Service options; • Product performance including through our real-time data analytics for fleet management; • Design and styling; • Product price; and • Manufacturing efficiency.
Many of those regulations are different from those applicable in the U.S. and may require redesign and/or retesting. For example, the E.U. has established new approval and oversight rules requiring that a national authority certify compliance with heightened safety rules, emissions limits and production requirements before vehicles can be sold in each E.U. member state.
For example, the E.U. has established new approval and oversight rules requiring that a national authority certify compliance with heightened safety rules, emissions limits and production requirements before vehicles can be sold in each E.U. member state. These changes could impact the rollout of new features in Europe.
To do this, we built out an extensive network of carefully curated authorized dealers, focusing on dealers that have proven to embrace the EV future of commercial vehicles and that are in areas of high demand. In many cases, our dealers are also located in states that provide incentives in addition to incentives provided by the federal government.
To do this, we have built out and continue to build a network of carefully curated authorized dealers, focusing on those that have embraced the EV future of commercial vehicles and that are in geographic areas of high demand. In certain cases, our Authorized Dealers are also located in states that provide their own tax incentives.
We are subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable state laws that protect and regulate employee health and safety.
We are subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable state laws that protect and regulate employee health and safety. ADAS Regulations We have also equipped our products with certain autonomous driving readiness features.
National Traffic and Motor Vehicle Safety Act, as amended, and numerous regulatory requirements established by the National Highway Traffic Safety Administration, or NHTSA, an operating administration of the U.S. Department of Transportation, or DOT, including applicable FMVSS standards. In 2023, we became the first company to achieve FMVSS certification on a vehicle controlled fully by-wire.
National Traffic and Motor Vehicle Safety Act, as amended, or Safety Act, and numerous regulatory requirements established by the National Highway Traffic Safety Administration, or NHTSA, an operating administration of the U.S. Department of Transportation, or DOT, including applicable FMVSS standards. We must also comply with all of NHTSA’s applicable U.S. Federal Motor Vehicle Safety Standards, or Safety Standards.
Our demo program is intended to allow potential fleet customers the opportunity to experience the benefits of its P7-C commercial vehicle in multiple top-hat configuration based on several partnerships with leading upfitters in North America.
In early 2024, we began customer deliveries of our P7-C cab chassis demonstration trucks for fleet evaluations in North America through our ADN. Our demonstration program is intended to allow potential fleet customers the opportunity to experience the benefits of our P7-C commercial vehicle in multiple upfitting configuration based on several partnerships with leading upfitters in North America.
REE’s data analytics capabilities may be used to further reduce total cost of ownership via intelligent preventative maintenance features.
Our REEai Cloud data analytics capabilities may be used to further reduce TCO via intelligent preventative maintenance features.
Granted patents are related to corner modules encompassing entire vehicle sub-systems for controlling the operation of the vehicle, such as unique suspension, steering, powertrain, and in-corner brake systems, installation and swapping of corner modules and communication and control systems for operating individual corner modules and vehicle platform.
Granted patents are related to (i) unique suspension, steering, powertrain, and brake systems, (ii) corner modules encompassing vehicle subsystems for controlling the operation of the vehicle, (iii) installation and swapping of corner modules, (iv) communication and control systems for operating individual corner modules and vehicle platform, (v) flat chassis designs, (vi) and manufacturing and testing methodologies.
REEcorners TM are our IP-protected foundational technology and key differentiator, designed to allow Powered by REE vehicles to deliver greater efficiency, lower TCO and complete design flexibility, all while being autonomous ready. REEcorners TM integrate steering, braking, suspension, powertrain, and control into a single module. Each REEcorner TM is independent with redundancies for enhanced fail-operation.
REEcorners ® are our IP-protected foundational technology and a key differentiator, designed to allow Powered by REE vehicles to deliver greater efficiency, lower TCO, and complete design flexibility, all while being autonomous-ready.
We believe that platforms using REEcorners TM will present significant functional and operational advantages over conventional EV “skateboards” currently available in the market and will enable superior vehicle specifications for cargo volume/length, payload, maneuverability and battery capacity.
We believe that platforms using REEcorners will present significant functional and operational advantages over conventional “skateboards” currently available in the market and will enable superior vehicle specifications for cargo volume/length, payload, maneuverability and battery capacity. Our technology is also designed to enable enhanced operational efficiencies due to a low center of gravity, high durability, long lifecycle and superior product ergonomics.
We plan to work with strategic partners to provide preventative maintenance services through smart service and artificial intelligence in combination with over-the-air updates that seek to ensure maintenance is performed before a part may fail. This is expected to offer significant savings by eliminating unnecessary part replacements and drastically reduce downtime.
We plan to work with strategic partners to integrate into their products our predictive data services through smart service and artificial intelligence in combination with over-the-air updates that seek to ensure maintenance is performed before a part may fail.
By leveraging our modular REE products, along with our efficient design and streamlined production process, we anticipate that new vehicle models can be developed and produced in as little as 18 to 24 months.
By leveraging our modular REE products, along with our efficient design and streamlined production process, we anticipate that new vehicle models can generally be developed and produced in 24 to 36 months, however specialized specifications and requirements from customers such as OEMs could require additional time, depending on the technical specifications and customization.
We believe EVs built on its products will have a lower TCO than those of our EV competitors. Our TCO advantages are expected to derive from its asset-light manufacturing model, low costs of operations due to anticipated greater cargo volume and lower maintenance costs due to the REEcorner’s TM durable design.
More specifically, we expect to derive our TCO advantages from our asset-light manufacturing model, low costs of operations due to anticipated greater cargo volume, and lower maintenance costs due to predictive maintenance and the REEcorner’s durable design.
Within this trend, we believe that fleet operators will be drawn to the reliability of operations, the lower TCO and high uptime of EVs, particularly as EVs achieve cost parity with ICEs. Furthermore, we believe that fleet operators will be drawn to the customizable design of our products, which seek to facilitate mission-specific vehicles to optimize fleet utilization.
Furthermore, we believe that fleet operators will be drawn to the customizable design of our products, which seek to facilitate mission-specific vehicles to optimize fleet utilization.
We are targeting delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS providers and autonomous drive companies. Our business plan is geared to allow these companies to build entire fleets based on REEcorner TM technology and Powered by REE™ platforms.
We target delivery and logistic fleets, dealers, new mobility players, MaaS providers, and autonomous driving companies. Our goal has been to allow these companies to build entire fleets based on our SDV Powered by REE platforms.
Like all companies operating in similar industries, we are subject to environmental regulation, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; and the remediation of environmental contamination.
Other applicable laws, both current and proposed, may hinder the path and timeline to introducing such features in the markets where they apply. 67 Table of C ontents General Governing Laws Like all companies operating in similar industries, we are subject to environmental laws and regulations, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; and the remediation of environmental contamination.
Market Opportunity We believe the shift to electric vehicles in the North American commercial vehicle market continues to grow driven by the maturity of electric trucks offerings yielding lower operating costs, the reduction in battery costs and improvement in charging infrastructure as well as strong regulatory and incentives tailwinds to support the growth in e-commerce, government regulations on carbon emissions and public policy, and consumer preference.
With respect to commercial vehicles, in particular, we believe the shift to electric vehicles in the North American commercial vehicle market continues to grow driven by the maturity of electric truck offerings yielding lower operating costs over time, the reduction in battery costs and improvement in charging infrastructure along with consumer preference.
We completed winter testing for the second consecutive year in cold conditions of minus 30 degrees Celsius, taking our trucks to the limits, testing safety, vehicle dynamics and battery performance to help ensure that we deliver a great product to our customers.
For example, we completed winter testing in cold conditions of minus 30 degrees Celsius, testing our P7 vehicle and the X-by-Wire technology therein on solid ice, testing safety, vehicle dynamics and battery performance to allow us to deliver a better product to our customers.
Additionally, we are pursuing multiple go-to-market paths to significantly accelerate the adoption of EVs by commercial fleet owners and operators.
Additionally, we had pursued, and would expect to again pursue if and when we resume manufacturing, pursuing multiple go-to-market paths to accelerate the adoption of our SDV vehicles by commercial fleet owners and operators.
This means that, during development, most ICE vehicle and EV manufacturers will design and produce individual new vehicle platforms with vehicle models being restricted as to size, shape or functionality. This creates a less nimble development process than is required to respond quickly and effectively to changing market demand and customer preferences unless such demand corresponds with existing “off-the-shelf” offerings.
This means that, during development, most ICE vehicle and EV manufacturers will design and produce individual new vehicle platforms with vehicle models being restricted as to size, shape or functionality.
As a result, in trying to address these changes in market preference, ICE vehicle and EV manufacturers are burdened by extremely high capital costs and long development cycles inherent in designing and engineering vehicles. We believe that consumer preference has continued to shift toward environmentally conscious and low emissions vehicle offerings.
As a result, in trying to address these changes in market preference, ICE vehicle and EV manufacturers are burdened by extremely high capital costs and long development cycles inherent in designing and engineering new models. REE’s Technology Approach We address such limitations with innovation at the core of our DNA.
This includes collaborations with partners not only to develop full vehicle offerings, such as leading upfitters, but also to provide a comprehensive ecosystem of enabling capabilities and services, such as vehicle financing, batteries, charging infrastructure, after-sales, service and Data-as-a-Service, or DaaS, for a full turn-key solution intended to enable and expedite a smooth transition for our potential customers from internal combustion engine, or ICE, vehicles to EV fleets.
This includes collaborations with partners not only to develop full vehicle offerings, such as leading upfitters, but also to provide a comprehensive ecosystem of enabling capabilities and services, such as after-sales, service and Data-as-a-Service, or DaaS, in order to allow for a smoother transition for our potential customers from internal combustion engine, or ICE, vehicles to EV fleets. 57 Table of C ontents If and when we resume manufacturing, we anticipate taking a measured approach to continue to allow time for customer and end-user feedback, stabilize production processes and quality assurance and, most importantly, optimize our bill of material and production costs.
Fleet usage, which most times may involve multiple shorter trips within range of a central base rather than long-distance travel, can reduce the “range anxiety” that has also been a limiting factor in EV adoption. In 2023, we completed certain development activities in connection with its production timeline, including physically testing and validating our products at the MIRA Technology Park.
Fleet usage, which most times may involve multiple shorter trips within range of a central base rather than long-distance travel, can reduce the “range anxiety” that has also been a limiting factor in EV adoption. REE’s go-to-market strategy is structured in two phases that continue in parallel to one another with points of overlap.
Additionally, there are regulatory changes being considered for several FMVSSs, and while we anticipate being in compliance with the proposed changes, there is no assurance until final regulation changes are enacted. Numerous FMVSSs apply to our products, such as braking requirements.
Additionally, there are regulatory changes being considered for several FMVSSs, and while we anticipate being in compliance with the proposed changes, there is no assurance until final regulation changes are enacted. On January 20, 2025, the Trump Administration issued an executive order delaying the approval of final rules, which affected the proposed rules for several FMVSS.
We are developing the technology for the core hardware and software for its REEcorner™ in house and pursuant to development agreements with certain strategic partners, with the goal of achieving superior vehicle dynamics while setting the highest bar for safety.
We had been developing core hardware and software technologies for our REEcorner® both in-house at our UK Integration Facility and pursuant to development agreements with certain strategic partners, with the goal of achieving superior vehicle dynamics while raising the bar for safety. 61 Table of C ontents Our Competitive Strengths We believe that our disruptive SDV technology and value proposition are unique to the industry and will offer a number of competitive strengths.
Each of the component systems that form our REEcorners™ and platforms are being engineered for optimal performance. We place a strong emphasis on functional integration, allowing for increased modularity. This is aimed to reduce the total number of parts, platform size and weight, ultimately providing more useable interior space in the vehicle cabin and a more overall cost-effective EV offering.
This is aimed to reduce the total number of parts and platform size, ultimately providing more useable interior space in the vehicle cabin and a more cost-effective offering.
We have started training our authorized dealers to certify technicians to provide service on our vehicles, facilitating adoption by fleets. As we seek to further expand our dealer network in North America, we offer financing solutions for our dealers through an agreement with Mitsubishi HC Capital America.
We have started training our authorized dealers to certify technicians to provide service on our vehicles, which we believe will assist in facilitating adoption by fleets. We anticipate further expanding our ADN in North America.
REEcorner™ can be integrated into full vehicles or chassis and our approach can meet the electrification needs across a diverse set of potential customers. REEcorner technology leverages X-By-Wire control technology to control each REEcorner™ of the vehicle, eliminating all mechanical connections between the REEcorners and the steering wheel and pedals in the passenger compartment and the wheels and braking systems.
REEcorner® was developed to be compatible with our X-by-Wire technology to allow for better vehicle control through each REEcorner® of the vehicle, eliminating all mechanical connections between the REEcorners® and the steering wheel and pedals in the driver cabin and the wheels and braking systems.
P7-C Chassis Cab and Cutway Chassis – The P7-C is a class 4 chassis cab, a fully electric commercial truck, available in regular bulkhead, walk-through, and cutaway variants. Used for applications such as delivery and a broad range of vocational applications, it is the first fully by-wire vehicle to obtain FMVSS certification.
Used for applications such as delivery and a broad range of vocational applications, it is the first fully by-wire vehicle to obtain FMVSS certification in the U.S. Powered by REE® P7-C vehicles have an all-wheel steer and optimal maneuverability for compact, urban environments.
Our Competitive Strengths We believe that our disruptive technology and business model are unique to the EV industry and will offer a number of competitive strengths. Attractive customer value proposition and superior total cost of ownership EVs aim to have lower TCO than ICE vehicles.
Attractive value proposition, safety, and superior total cost of ownership Our SDVs aim to have lower TCO than ICE vehicles. We believe that vehicles built on our products will have a lower TCO than those of our competitors, which can enhance customer and end-user satisfaction.
Compliance with these rules may include the need to obtain permits and licenses and to allow inspections of our facilities and products. C. Organizational Structure 53 Table of Contents Name of Subsidiary Country of Incorporation and Place of Business Proportion of Ordinary Shares Held by REE REE Automotive UK Limited United Kingdom 100% REE Automotive USA Inc.
Organizational Structure Name of Subsidiary Country of Incorporation and Place of Business Proportion of Ordinary Shares Held by REE REE Automotive UK Limited United Kingdom 100% REE Automotive USA Inc. United States 100% REE Automotive GmbH Germany 100% REE Automotive Japan K.K. Japan 100% D.
Lowering REE’s customer acquisition costs Further, with capital efficiency in mind, we “complete not compete”. In order to provide the highest level of customer service, we are leveraging our dealer network to provide after-sales parts and service. Dealers look to parts and service revenues to help drive profitability and are trusted partners to the fleets in their service areas.
In order to provide customer service, we are leveraging our ADN to provide after-sales parts and service. We believe that this provides Authorized Dealers with parts and service revenues to help drive profitability and allows them to be partners to the fleets in their service areas with respect to our vehicles.
For example, after year end, through its partnership with Knapheide, After year end, our Class 4 P7-C demo electric cab chassis was upfitted with Knapheide’s KUV body, aimed to provide a turnkey solution with advantages including low load floor, greater driver maneuverability and comfort and high driver visibility .
For example, Penske began demonstrations of our P7-C truck upfitted with a Wabash body, and U-Haul received one of our products and has evaluated it as a solution to electrify its fleets. Additionally, Knapheide showcased our P7-C with a KUV body, which was aimed to provide benefits including low load floor, greater driver maneuverability and comfort and high driver visibility.
REE’s technology approach Innovation is at the core of our DNA. This is what drives us throughout the development process all the way down to the architecture of every detail of our design. We have designed REEcorner™ by-wire steering, braking and drive to deliver better stability and greater maneuverability, designed for better performance and safety overall.
This is what drives us throughout the development process all the way down to the architecture of every detail of our SDV design. We have developed core innovations that make up the foundation of our SDV technology offering.
The P7-C is also subject to EPA and California Air Resources Board certification for vehicle greenhouse gases and zero emission powertrains. We obtained the EPA certification in late 2023 and achieved CARB certification in early 2024.
The P7-C is also subject to the Clean Air Act, as administered by the EPA, and the California Air Resources Board, or CARB, certification for vehicle greenhouse gases and zero emission powertrains. This requires that we obtain an EPA-issued Certificate of Conformity and a CARB executive order with respect to the emissions for our vehicles.
As we grow our ESG program, we are also developing our internal data collection and disclosure capabilities to ensure we can meet investor expectations and comply with regulatory bodies’ proposed ESG tracking and reporting obligations. REE’s Manufacturing Approach We are manufacturing, and plan to continue to manufacture, our products via a global network of Tier 1 partners and suppliers.
As we grow our ESG program, we are also developing our internal data collection and disclosure capabilities in an effort to meet investor expectations and, if and when applicable, comply with regulatory bodies’ proposed ESG tracking and reporting obligations. We endeavor to respect, value, and empower our stakeholders. In addition, we seek to protect the communities in which we operate.
We use lithium-ion cells in the high voltage battery packs in Powered by REE vehicles. The use, storage, and disposal of the battery modules is regulated under federal law. Additionally, Powered by REE vehicles are not currently subject to non-U.S. safety, environmental and other regulations.
We use lithium-ion cells in the high voltage battery packs in our vehicles. The use, storage, and disposal of the battery modules is regulated under federal law. We may also be subject to “Right to Repair” laws, which may require us to provide third-party access to our network and/or vehicle systems.
Powered by REE P7-C vehicles have a 126 kWh battery, 6,000 lbs payload and 150 miles of range. Enabled by REEcorner and by-wire control, P7-C vehicles are designed to provide major advantages to fleet owners such as reduced TCO, safety and efficiency.
Enabled by REEcorner® and by-wire control, P7-C vehicles are designed to provide major advantages to fleet owners such as reduced TCO with smart maintenance and REEcorner service replacement, which we estimate can occur in under one hour, improved safety and maximized efficiency.
In the United States, REE entered into a lease agreement for its Austin, Texas headquarters. The facility is approximately 118,132 square feet (10,975 square meter), under a lease agreement that expires in 2032.
The facility is approximately 118,132 square feet (10,975 square meters), under a lease agreement that expires in 2032. In 2024, we partially subleased this facility to a third party, which was terminated in early 2025.
In doing so, we seek to reduce our up-front capital investment and eliminate recurring fixed costs and overhead that would be required for us to own and operate our own product assembly facilities. We believe this will enable us to remain a comparatively asset-light enterprise, which will further help to increase our operating margin and overall return on investment.
We believe this will enable us to remain a comparatively asset-light enterprise, which will further help to increase our operating margin and overall return on investment. In the future, leveraging the flexibility inherent in the REEcorner® design, we have the ability to scale up or down from the Class 4 and 5 market that we serve today.
In 2023, we continued to expand our Authorized Dealership Network across the U.S. and Canada by 900% year-over-year, or YoY. Each of our Authorized Dealers has placed initial orders.
Using this large dealer network, we expect to provide sales and service points to the fleet customers across North America. In 2024, we continued to expand our Authorized Dealership Network to approximately 80 locations across the U.S. and Canada. As of the date of this Annual Report, each of our Authorized Dealers have placed initial orders.
Our technology is also designed to enable enhanced operational efficiencies due to low center of gravity, high durability, long lifecycle and superior product ergonomics (low step-in height affords easy and fast embarking and disembarking from vehicle, high driver visibility thanks to enhanced field of vision and optimal driver ergonomics).
For example, low step-in height affords easy and fast embarking and disembarking from vehicle and we are able to provide high driver visibility due to enhanced field of vision and optimal driver ergonomics. Our development of FMVSS, EPA, CARB, and HVIP certified X-by-Wire software control technology challenges century-old automotive concepts.
We aim to offer many customer benefits including reduction in TCO, lower maintenance and spare-part inventory management costs, higher active and passive safety, improved vehicle efficiency, advanced driver-assistance systems, or ADAS, compatibility. 44 Table of Contents By completing and not competing, we can partner with other vehicle manufacturers in the automotive industry where electric and autonomous vehicles will be “powered by REE™”, allowing faster and larger adaption of our X-by-Wire technology and electrification scale.
By “completing and not competing”, we can partner with customers, including OEMs, in the automotive industry where electric and autonomous vehicles will be “Powered by REE”, allowing for what we aim to be a faster and larger adoption of our X-by-Wire technology and electrification at scale.
We believe we are well positioned in the growing in the electric commercial vehicle market relative to its competitors because of its technologically, superior product offering, and better unit economics. Our market growth strategy has two phases.
In regard to the latter, we believe that we are well-positioned in the EV commercial vehicle market relative to our competitors due to better unit economics, improved safety and security, and TCO advantages including lower vehicle operational costs and lower maintenance costs.
In 2024, we became the first company to achieve FMVSS certification on a vehicle controlled fully by wire. Additionally in 2024, we achieved CARB certification. We also obtained EPA certification for its P7-C chassis cab and P7-S stripped chassis products in 2023. As of year end 2023, we completed all P7 concept validation of both corner and platform design.
Moreover, in 2024, we became the first company in the U.S. to achieve FMVSS certification on a vehicle controlled fully by wire. We further achieved CARB certification in 2024. We believe that these achievements demonstrate the strength of our technology.
In 2023, we achieved United States Environmental Protection Agency, or EPA, approval for our P7-C electric trucks. In January 2024, and following months of testing together with a third party, we became the first OEM to certify a commercial truck controlled fully by-wire to the FMVSS standards.
Environmental Protection Agency for our P7-C vehicles. In January 2024 of the following year, upon the completion of a test program, which included third party evaluation, we became the first in the U.S. to obtain a FMVSS certification on our P7-C through the self-certification process for a fully by-wire vehicle of any category.
REE’s Products We have developed core innovations which make up the foundation of our products. Our products contain a number of key technological advancements and critical design functions, which we believe provide distinct advantages over competitor offerings: 1.
In particular, our SDV technology contains what we believe to be a number of key technological advancements and critical design functions that provide distinct advantages over competitor offerings. These advancements include the management of a vehicle’s operations and features through software to enable a safer and more stable means of transport.
We are also required to comply with other federal and state laws and regulations, including, among other regulations, ensuring its products do not contain defects related to motor vehicle safety, recall requirements, GHG and electric vehicle reporting, reporting required notices, bulletins, and other communications, Early Warning Information reporting, foreign recall reporting and owner’s manual requirements.
We also must comply with laws relating to defects related to motor vehicle safety, recall requirements, reporting required notices, bulletins, and other communications. In 2023, we became the first company to achieve FMVSS certification on a vehicle controlled fully by-wire.
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Item 5.B . Operating and Financial Review and Prospects-Liquidity and Capital Resources. ” B. Business Overview Company Overview REE is an automotive technology company focused on building commercial electric vehicles controlled fully by wire, what REE calls X-by-Wire.
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Item 5.B . Operating and Financial Review and Prospects-Liquidity and Capital Resources. ” B. Business Overview Company Overview We are an automobile technology company that develops and produces cutting edge software-defined vehicle technology that manages vehicle operations and features through proprietarily-developed software, enabling what we believe to be safer, more modular, and better performing vehicles.
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Unbound by legacy thinking, we created the world’s first certified, software-driven, fully by-wire electric vehicle, built around its proprietary REEcorner™, which packs critical vehicle components into a single compact module positioned between the chassis and the wheel.
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Our advanced SDV technology utilizes zonal architecture to enhance redundancy and stability and it contains the capabilities for updates and improvements over-the-air throughout an SDV’s lifespan. This makes Powered by REE® vehicles highly adaptable to customer and market changes. Reliant upon our patent-protected SDV technology, our full by-wire P7 electric commercial truck is certified under U.S.
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The REEcorner TM , our proprietary by-wire technology for drive, steer and brake control, enables X-by-Wire vehicle control and is designed to allow for key benefits for building commercial electric trucks, such as reduction in total cost of ownership, or TCO, operational efficiency, and many other benefits as described below.
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Federal Motor Vehicle Safety Standards, or FMVSS. Powered by REE vehicles demonstrate our commitment to offer what we believe to be intelligent, flexible, and scalable mobility solutions while shortening and streamlining the processes, costs and time to market for such vehicles for our customers.
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REE’s technology, which is patent protected, and design make it possible for OEMs, delivery and logistics fleets, dealers, e-commerce retailers, Mobility-as-a-Service providers and others, to build any size or shape of electric vehicle.
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Our approach of “complete not compete” allows original equipment manufacturers to license our technology in order to design and build vehicles reliant upon our SDV technology to their specific requirements and needs.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Major Shareholders” for additional information. 88 Table of Contents C. Interests of experts and counsel Not applicable.
Major Shareholders” for additional information. C. Interests of experts and counsel Not applicable. 111 Table of C ontents
Since our inception we have granted options to purchase, and restricted share units underlying, our Ordinary Shares to our officers and certain of our directors. Such award agreements contain acceleration provisions upon certain merger, acquisition, or change of control transactions. We describe our option plans under “Item 6.B.
Such award agreements contain acceleration provisions upon certain merger, acquisition, or change of control transactions. We describe our option plans under “Item 6.B.
The following table provides information regarding the options to purchase our Class A Ordinary Shares held by each of our directors and officers who beneficially owns 1% or more of our Class A Ordinary Shares as of March 12, 2024: Name/Title Number of Shares Underlying Options Exercise Price Expiration Date Daniel Barel, Co-Founder, Chief Financial Officer and Director 1,390,287 $ 0.01 – 18.22 01/06/2027 - 07/22/2031 Ahishay Sardes, Co-Founder, Chief Technology Officer and Director 1,390,287 $ 0.01 – 18.22 01/06/2027 - 07/22/2031 See “Item 7.A.
Compensation.” If the relationship between us and a senior manager, or a director, is terminated, except for cause (as defined in the various option plan agreements), all options that are vested will remain exercisable for ninety days after such termination in the case of our executive officers, or one year in the case of our directors. 110 Table of C ontents The following table provides information regarding the options to purchase our Class A Ordinary Shares held by each of our directors and officers who beneficially owns 1% or more of our Class A Ordinary Shares as of May 7, 2025: Name/Title Number of Shares Underlying Options Exercise Price Expiration Date Daniel Barel, Co-Founder, Chief Financial Officer and Director 1,390,287 $ 0.01 – 18.22 01/06/2027 - 07/22/2031 Ahishay Sardes, Co-Founder, Chief Technology Officer and Director 1,390,287 $ 0.01 – 18.22 01/06/2027 - 07/22/2031 See “Item 7.A.
These agreements provide for notice periods of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the officer will continue to receive base salary and benefits. These agreements also contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. Equity Awards.
We have entered into written employment agreements with each of our officers. These agreements provide for notice periods of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the officer will continue to receive base salary and benefits.
On October 29, 2021, REE entered into a license agreement with SpecterX for secure file exchange services. The co-founder and CEO of SpecterX is the brother of co-founder, director, and CEO Daniel Barel. Daniel Barel is also the Chairman of the Board and an investor of SpecterX. Former REE director Hans Thomas is also an investor of SpecterX.
Since 2021, the Company’s co-founder, director, and CEO Daniel Barel’s father-in-law is employed by the Company in the selling, general, and administrative department. SpecterX Transaction . On October 29, 2021, REE entered into a license agreement with SpecterX for secure file exchange services. The co-founder and CEO of SpecterX is the brother of co-founder, director, and CEO Daniel Barel.
During 2021, REE entered into an agreement with co-founder, director, and CEO Daniel Barel, relating to joint ownership of a company car. REE undertook to provide Daniel Barel with a company car, the value of which is an amount of up to NIS 300,000 to be borne by REE.
REE undertook to provide Daniel Barel with a company car, the value of which is an amount of up to NIS 300,000 to be borne by REE. The excess cost of the car purchased for such purpose has been, and the ongoing fixed cost of the car will continue to be, borne by Daniel Barel.
The excess cost of the car purchased for such purpose has been, and the ongoing fixed cost of the car will continue to be, borne by Daniel Barel. Such car is registered under REE’s name, but Daniel Barel is entitled to an ownership portion of such car, corresponding to the excess acquisition cost thereof borne by him.
Such car is registered under REE’s name, but Daniel Barel is entitled to an ownership portion of such car, corresponding to the excess acquisition cost thereof borne by him. The full value of the vehicle is recorded in our balance sheet as of December 31, 2024. Employment of Daniel Barel’s Father-in-Law .
Prior to entering into the agreement with SpecterX, REE conducted an extensive analysis of the available solutions, and determined that SpecterX best met REE’s needs. In 2023, REE paid SpecterX $45,630. Carpentry Services from Nissim Sardes Welding Workshop. During the year ended December 31, 2021, REE engaged Nissin Sardes Welding Workshop to provide carpentry and welding services.
Daniel Barel is also the Chairman of the Board and an investor of SpecterX. Prior to entering into the agreement with SpecterX, REE conducted an extensive analysis of the available solutions, and determined that SpecterX best met REE’s needs. In 2024, REE paid SpecterX $42,120. Employment and Related Agreements.
Item 6.C. Board Practices — Approval of Related Party Transactions under Israeli Law — Exculpation, Insurance and Indemnification of Office Holders ” for additional information. Tax Indemnity Agreement We have entered into a tax indemnity agreement with private placement warrantholders, one of which, is 10X Capital SPAC Sponsor I LLC, or the Sponsor. Mr.
Board Practices — Approval of Related Party Transactions under Israeli Law — Exculpation, Insurance and Indemnification of Office Holders ” for additional information. Agreements with Directors and Officers Joint Ownership Agreement for Company Vehicle. During 2021, REE entered into an agreement with co-founder, director, and CEO Daniel Barel, relating to joint ownership of a company car.
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Hans Thomas is the founding partner and a director of the Sponsor.
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Item 6.C. Board Practices — Approval of Related Party Transactions under Israeli Law .” The Company has entered into the following agreements, which were approved by REE’s board of directors in accordance with Israeli law, and, where applicable, by REE’s shareholders to the extent required by Israeli law.
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On October 19, 2022 the Audit Committee had decided to classify the Tax Indemnity Agreement as an “extraordinary transaction”, considering that such transaction in not executed in the ordinary course of business; Pursuant to section 270(1) and section 272(a) of the Companies Law, on October 19, 2022 the Audit Committee and the Board have determined that it is advisable and in the best interest of the Company to (i) indemnify the private placement warrantholders in the event the ITA determines that a private placement warrantholder is subject to withholding tax or if a private placement warrantholder fails to obtain an ITA Exemption, which indemnity is to take the form of a Tax Indemnity Agreement; (ii) the potential exposure to the Company, as has been calculated by the management of the Company, as of the date of the exchange offer, does not exceed $0.2 million; considering that the available funds of the company, which to the Company’s best knowledge, exceed $180 million as of September 2022, and (iii) that the Company’s strength, and the nature and purpose of the aforementioned capital consolidation, such exposure is not material nor does it likely to substantially influence the 87 Table of Contents profitability, property or liabilities of the Company.
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The following is a description of our related party transactions since January 1, 2024: As of May 7, 2025, the following shareholders beneficially owned more than 10% of the Company’s outstanding Class A Ordinary Shares and can exercise significant influence over the Company through voting power in excess of 10% and/or a director on our board of directors.
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In 2023, the Company received a withholding tax exemption from ITA, therefore the tax indemnity agreement is no longer applicable. Agreements with Directors and Officers Anti-Dilution Protection.
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In particular, M&G owned approximately 19.5% of our outstanding Class A Ordinary Shares representing approximately 10.1% of our total voting power. Samvardhana Motherson Automotive Systems Group B.V., an indirect wholly-owned subsidiary of Samvardhana Motherson International Limited, or collectively Motherson, owned approximately 18.5% of our outstanding Class A Ordinary Shares representing approximately 9.3% of our total voting power.
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Each of our Founders, Daniel Barel and Ahishay Sardes, were granted 39.4 million additional options to purchase Class A Ordinary Shares, which were triggered by the transactions contemplated under the Merger Agreement (and/or the PIPE Investment). Joint Ownership Agreement for Company Vehicle.
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March 2025 Registered Direct Offerings On March 26, 2025, we conducted the March 26 Offering, as more fully described in Item 5.B. “Liquidity and Capital Resources - March 26, 2025 Securities Purchase Agreements & Lock-up Agreement”, providing for the issuance of an aggregate of 2,219,176 Class A Ordinary Shares.
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The full value of the vehicle is recorded in our balance sheet as of December 31, 2023. Employment of Daniel Barel’s Father-in-Law . During 2021, REE hired co-founder, director, and CEO Daniel Barel’s father-in-law as an employee in the selling, general, and administrative department. He is paid customary compensation for this position. SpecterX Transaction .
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The offering raised gross proceeds of approximately $9.4 million before deducting applicable fees and expenses. In particular, M&G Investment Management Limited, through its affiliated entities and/or advised entities, invested approximately $1.40 million in the March 26 Offering. Additionally, Motherson invested approximately $6.8 million. On March 18, 2025, we conducted the March 18 Offering, as more fully described in Item 5.B.
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Nissim Sardes Welding Workshop is owned and operated by co-founder and Chief Technology Officer Ahishay Sardes’ father and brother. Employment and Related Agreements. We have entered into written employment agreements with each of our officers.
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“Liquidity and Capital Resources - March 18, 2025 Securities Purchase Agreements & Lock-up Agreement”, providing for the issuance of an aggregate of 6,376,631 Class A Ordinary Shares. The offering raised gross proceeds of approximately $27.1 million before deducting applicable fees and expenses.
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Compensation.” If the relationship between us and a senior manager, or a director, is terminated, except for cause (as defined in the various option plan agreements), all options that are vested will remain exercisable for ninety days after such termination in the case of our executive officers, or one year in the case of our directors.
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In particular, M&G Investment Management Limited, through its affiliated entities and/or advised entities, invested approximately $4.08 million in the March 18 Offering. September 2024 Registered Direct Offering On September 15, 2024, as more fully described in Item 5.B “Liquidity and Capital Resources - September 2024 Securities Purchase Agreements”, the Company conducted the September 2024 Offering.
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However, in lieu of Class A Ordinary Shares, certain investors purchased pre-funded warrants exercisable into 3,639,893 Class A Ordinary Shares. The total net proceeds were approximately $44,877 after deducting transaction costs, of which $29,877 was recorded in the additional paid-in capital and the reminder was recorded as pre-funded warrants liability.
Added
In particular, M&G Investment Management Limited, through its affiliated entities and/or advised entities, invested approximately $20 million in the September 2024 Offering. Additionally, Motherson invested approximately $15 million in the September 2024 Offering.
Added
Motherson Supply Chain Management Services Agreement On September 15, 2024, we executed a supply chain management services agreement with Motherson, pursuant to which we appointed Motherson (including any of its affiliates) to provide certain services to REE on an exclusive basis.
Added
In that regard, Motherson agreed to provide services relating to development, management, and optimization of our supply chain, which includes supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration.
Added
We agreed to pay Motherson, on a quarterly basis, an amount equal to fifty percent (50%) of certain cost improvements that would be achieved under the 109 Table of C ontents agreement in addition to annual payments for such resources required to be deployed by Motherson for the purpose of rendering the services under the agreement, which shall be agreed upon by us and Motherson.
Added
The agreement will terminate upon the later of three (3) years or when Motherson has received an amount equal to $30 million in quarterly fees. In addition, the agreement will automatically renew for consecutive one (1) year terms unless either party provides notice of termination within 180 days prior to the end of a term.
Added
In addition, Motherson may terminate the agreement for any reason upon providing 180 day written prior notice . March 2024 Public Offering On March 5, 2024, REE closed a public offering for net proceeds of approximately $14.15 million to the Company, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company.
Added
M&G purchased approximately $8 million of the Class A Ordinary Shares issued and sold in the offering. Indemnification Agreements Our articles permit us to exculpate, indemnify and insure each of our directors and office holders to the fullest extent permitted by Israeli law.
Added
We have entered into agreements with each of our directors and executive officers exculpating them in advance, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care and undertaking to indemnify them to the fullest extent permitted by law, subject to certain exceptions.
Added
This indemnification is limited to events determined as foreseeable by the board of directors based on our activities and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances. We have also obtained directors and officers insurance for each of our executive officers and directors. For further information, see “ Item 6.C.
Added
These agreements also contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the non-competition provisions may be limited under applicable law. Equity Awards. Since our inception we have granted options to purchase, and restricted share units underlying, our Ordinary Shares to our officers and certain of our directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person’s title, a director, and any other manager directly subordinate to the general manager.
An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person’s title, a director, and any other manager directly subordinate to the general manager.
If the Compensation Committee determines that, on a particular purchase date, the number of shares with respect to which options are to be exercised either exceeds the number of shares available under the ESPP or the Offering Period Limit (as defined i the ESPP), the shares will be allocated pro rata in a uniform manner as practicable and as the Compensation Committee deems equitable.
If the Compensation Committee determines that, on a particular purchase date, the number of shares with respect to which options are to be exercised either exceeds the number of shares available under the ESPP or the Offering Period Limit (as defined in the ESPP), the shares will be allocated pro rata in a uniform manner as practicable and as the Compensation Committee deems equitable.
Our Amended and Restated Articles will allow us to exculpate, indemnify, and insure our office holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue of being an office holder. Our office holders are currently covered by a directors and officers’ liability insurance policy.
Our Amended and Restated Articles allow us to exculpate, indemnify, and insure our office holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue of being an office holder. Our office holders are currently covered by a directors and officers’ liability insurance policy.
Each non-employee director is granted an initial grant of $100,000 worth of RSUs to purchase Ordinary Shares, plus a prorated portion of $150,000, which will be granted on the date of the director’s election or appointment to the Board, based on the closing share price on the date of grant.
Each non-employee director is granted an initial grant of $100,000 worth of RSUs to purchase Class A Ordinary Shares, plus a prorated portion of $150,000, which will be granted on the date of the director’s election or appointment to the Board, based on the closing share price on the date of grant.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria; • reasonable litigation expenses, including legal fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction; • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; and • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder pursuant to certain provisions of the Israeli Economic Competition Law, 5758-1988.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria; • reasonable litigation expenses, including legal fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction; • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; and 102 Table of C ontents • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder pursuant to certain provisions of the Israeli Economic Competition Law, 5758-1988.
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association: • a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the Company; 81 Table of Contents • a breach of the duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder; • a financial liability imposed on the office holder in favor of a third party; • a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and • expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law.
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association: • a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the Company; • a breach of the duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder; • a financial liability imposed on the office holder in favor of a third party; • a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and • expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law.
The duty of loyalty requires an office holder to act in good faith and in the best interests of the Company, and includes, among other things, the duty to: • refrain from any act involving a conflict of interest between the performance of the office holder’s duties in the company and the office holder’s other duties or personal affairs; • refrain from any activity that is competitive with the business of the company; 79 Table of Contents • refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for the office holder or others; and • disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of the office holder’s position.
The duty of loyalty requires an office holder to act in good faith and in the best interests of the Company, and includes, among other things, the duty to: • refrain from any act involving a conflict of interest between the performance of the office holder’s duties in the company and the office holder’s other duties or personal affairs; • refrain from any activity that is competitive with the business of the company; • refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for the office holder or others; and • disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of the office holder’s position.
Shareholder Duties Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters: • an amendment to the company’s articles of association; 80 Table of Contents • an increase of the company’s authorized share capital; • a merger; or • interested party transactions that require shareholder approval.
Shareholder Duties Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters: • an amendment to the company’s articles of association; • an increase of the company’s authorized share capital; • a merger; or • interested party transactions that require shareholder approval.
(5) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2023, with respect to equity-based compensation, reflecting also equity awards made in previous years which may have vested during the current year.
(5) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2024, with respect to equity-based compensation, reflecting also equity awards made in previous years which may have vested during the current year.
Such benefits and perquisites may include, to the extent applicable to each executive, payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurances (such as life, disability and accident insurances), convalescence pay, payments for Medicare and social security, tax gross-up payments and other benefits and perquisites consistent with our guidelines, regardless of whether such amounts have actually been paid to the executive.
Such benefits and perquisites may include, to the extent applicable to each executive, payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurances (such as life, disability and accident insurances), convalescence pay, payments for Medicare and social security, tax gross-up payments and other benefits and perquisites consistent with our compensation policy, regardless of whether such amounts have actually been paid to the executive.
To our knowledge, other than as disclosed in this Annual Report and in other filings with the SEC, there has been no significant change in the percentage ownership held by any major shareholder since January 1, 2019.
To our knowledge, other than as disclosed in this Annual Report and in other filings with the SEC, there has been no significant change in the percentage ownership held by any major shareholder since January 1, 2022.
(4) Amounts reported in this column refer to Variable Compensation such as earned commissions, incentives and earned or paid bonuses as recorded in our financial statements for the year ended December 31, 2023.
(4) Amounts reported in this column refer to variable compensation such as earned commissions, incentives and earned or paid bonuses as recorded in our financial statements for the year ended December 31, 2024.
Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time they occurred. For a description of the procedures governing our approval of related party transactions, see “ Item 6.C.
Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time they occurred. For a description of the procedures governing our approval of related party transactions, see “
These responsibilities include: • appointing, retaining, and overseeing our independent auditors, subject to ratification by the board of directors, and in the case of retention, subject to ratification by the shareholders; • pre-approving audit and non-audit services to be provided by the independent auditors and related fees and terms; • overseeing the accounting and financial reporting processes of our company; • managing audits of our financial statements; • preparing all reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act; • reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication, filing, or submission to the SEC; • recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law, as well as approving the yearly or periodic work plan proposed by the internal auditor; • reviewing with our general counsel and/or external counsel, as deemed necessary, legal and regulatory matters that may have a material impact on the financial statements; • identifying irregularities in our business administration, inter alia, by consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; • reviewing policies and procedures with respect to transactions (other than transactions related to compensation or terms of services) between REE and its officers and directors, affiliates of officers or directors, or transactions that are not in the ordinary course of REE’s business and deciding whether to approve such acts and transactions if so required under the Companies Law; and • establishing procedures for handling employee complaints relating to the management of our business and the protection to be provided to such employees. 76 Table of Contents Internal Auditor Under the Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee.
These responsibilities include: • appointing, retaining, and overseeing our independent auditors, subject to ratification by the board of directors, and in the case of retention, subject to ratification by the shareholders; • pre-approving audit and non-audit services to be provided by the independent auditors and related fees and terms; • overseeing the accounting and financial reporting processes of our company; • managing audits of our financial statements; • preparing all reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act; • reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication, filing, or submission to the SEC; • recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law, as well as approving the yearly or periodic work plan proposed by the internal auditor; • reviewing with our general counsel and/or external counsel, as deemed necessary, legal and regulatory matters that may have a material impact on the financial statements; • identifying irregularities in our business administration, inter alia, by consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; 97 Table of C ontents • reviewing policies and procedures with respect to transactions (other than transactions related to compensation or terms of services) between REE and its officers and directors, affiliates of officers or directors, or transactions that are not in the ordinary course of REE’s business and deciding whether to approve such acts and transactions if so required under the Companies Law; and • establishing procedures for handling employee complaints relating to the management of our business and the protection to be provided to such employees.
External Directors Under the Companies Law, companies incorporated under the laws of the State of Israel that are “public companies,” including companies with shares listed on Nasdaq, are required to appoint at least two external directors.
External Directors Under the Companies Law, companies incorporated under the laws of the State of Israel that are “public companies”, including companies with shares listed on Nasdaq, are required to appoint at least two external directors.
The Compensation Committee has the authority to take any actions necessary or desirable for the administration of the ESPP, including adopting sub-plans 70 Table of Contents applicable to particular participating subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code, or special rules applicable to participants in particular participating subsidiaries or particular locations.
The Compensation Committee has the authority to take any actions necessary or desirable for the administration of the ESPP, including adopting sub-plans applicable to particular participating subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code, or special rules applicable to participants in particular participating subsidiaries or particular locations.
In the case of a new chief executive officer, the compensation committee may waive the shareholder approval requirement with regard to the compensation of a candidate for the chief executive officer position if the compensation committee determines that: (i) the compensation arrangement is consistent with the company’s compensation policy, (ii) the chief executive officer candidate did not have a prior business relationship with the company or a controlling shareholder of the company and (iii) subjecting the approval of the engagement to a shareholder vote would impede the company’s ability to employ the chief executive officer candidate.
In the case of a new chief executive officer, the compensation committee may waive the shareholder approval requirement with regard to the compensation of a candidate for the chief executive officer position if the compensation committee 104 Table of C ontents determines that: (i) the compensation arrangement is consistent with the company’s compensation policy, (ii) the chief executive officer candidate did not have a prior business relationship with the company or a controlling shareholder of the company and (iii) subjecting the approval of the engagement to a shareholder vote would impede the company’s ability to employ the chief executive officer candidate.
Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include: base salary, annual bonuses, and other cash bonuses (such as a signing bonus and special bonuses with respect to any special achievements, such as outstanding personal achievement, outstanding personal effort, or outstanding company performance), equity-based compensation, benefits and retirement and termination of service arrangements.
Pursuant to our compensation policy, the compensation that may be granted to an 99 Table of C ontents executive officer may include: base salary, annual bonuses, and other cash bonuses (such as a signing bonus and special bonuses with respect to any special achievements, such as outstanding personal achievement, outstanding personal effort, or outstanding company performance), equity-based compensation, benefits and retirement and termination of service arrangements.
Under the 2021 Plan, the administrator has the authority, subject to applicable law, to interpret the terms of the 2021 Plan and any award agreements or awards granted thereunder, designate recipients of awards, determine and amend the terms of awards, including the exercise price of an option award, the fair market value of an ordinary share, the time and vesting schedule applicable to an award or the method of payment for an award, accelerate or amend the vesting schedule applicable to an award, prescribe the forms of 72 Table of Contents agreement for use under the 2021 Plan and take all other actions and make all other determinations necessary for the administration of the 2021 Plan.
Under the 2021 Plan, the administrator has the authority, subject to applicable law, to interpret the terms of the 2021 Plan and any award agreements or awards granted 93 Table of C ontents thereunder, designate recipients of awards, determine and amend the terms of awards, including the exercise price of an option award, the fair market value of an ordinary share, the time and vesting schedule applicable to an award or the method of payment for an award, accelerate or amend the vesting schedule applicable to an award, prescribe the forms of agreement for use under the 2021 Plan and take all other actions and make all other determinations necessary for the administration of the 2021 Plan.
Pursuant to the amended compensation policy, the non-executive directors are paid an annual cash retainer and receive a fixed annual equity grant. The policy does not provide for the payment of any benefits upon termination of any non-executive director’s service. 68 Table of Contents Cash retainer.
Pursuant to the amended compensation policy, the non-executive directors are paid an annual cash retainer and receive a fixed annual equity grant. The policy does not provide for the payment of any benefits upon termination of any non-executive director’s service. Cash retainer.
Each participant will be granted, on the first trading day of each offering period, an option to purchase, on the last trading day of the offering period, a number of shares of our common stock determined by dividing the participant’s accumulated payroll deductions by the applicable purchase price.
Each participant will be granted, on the first trading day of each offering period, an option to purchase, on the last trading day of the offering period, a number of our ordinary shares determined by dividing the participant’s accumulated payroll deductions by the applicable purchase price.
However, if the chief executive officer candidate will serve as a member of the board of directors, such candidate’s compensation terms as chief executive officer must be approved in accordance with the rules applicable to approval of compensation of directors. 83 Table of Contents D. Employees.
However, if the chief executive officer candidate will serve as a member of the board of directors, such candidate’s compensation terms as chief executive officer must be approved in accordance with the rules applicable to approval of compensation of directors. D. Employees.
The 2021 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Ordinance, and Section 3(i) of the Ordinance and for awards granted to REE’s United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes, Section 422 of the Code and Section 409A of the Code.
The 2021 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Ordinance, and Section 3(i) of the Ordinance and for awards granted to REE’s U.S. employees or service providers, including those who are deemed to be residents of the U.S. for tax purposes, Section 422 of the Code and Section 409A of the Code.
In such case, REE’s board of directors in its sole discretion shall make an appropriate adjustment. Employee Stock Purchase Plan The REE Employee Stock Purchase Plan (the “ESPP”) was approved by REE’s board of directors and shareholders on July 21, 2021.
In such case, REE’s board of directors in its sole discretion shall make an appropriate adjustment. Employee Stock Purchase Plan The REE Employee Stock Purchase Plan, or ESPP, was approved by REE’s board of directors and shareholders on July 21, 2021.
Assumptions and key variables used in the calculation of such amounts are described in Note 11 to our audited consolidated financial statements, which are included in this Annual Report. Compensation Policy for Non-Executive Directors In July 2021, our shareholders amended and re-adopted the compensation policy for our non-executive directors.
Assumptions and key variables used in the calculation of such amounts are described in Note 11 to our audited consolidated financial statements, which are included in this Annual Report. 89 Table of C ontents Compensation Policy for Non-Executive Directors In July 2021, our shareholders amended and re-adopted the compensation policy for our non-executive directors.
The duty of care includes, among other things, a duty to use reasonable means, in light of the circumstances, to obtain: • information on the business advisability of a given action brought for the office holder’s approval or performed by virtue of the office holder’s position; and • all other important information pertaining to such action.
The duty of care includes, among other things, a duty to use reasonable means, in light of the circumstances, to obtain: • information on the business advisability of a given action brought for the office holder’s approval or performed by virtue of the office holder’s position; and 100 Table of C ontents • all other important information pertaining to such action.
This amount includes $0.5 million set aside or accrued to provide pension, severance, retirement or similar benefits or expenses, but does not include business travel, car expenses, relocation, professional and business association dues and expenses reimbursed to office holders, and other benefits commonly reimbursed or paid by companies in Israel.
This amount includes $0.4 million set aside or accrued to provide pension, severance, retirement or similar benefits or expenses, but does not include business travel, car expenses, relocation, professional and business association dues and expenses reimbursed, and other benefits commonly reimbursed or paid by companies in Israel.
Section 102 includes two alternatives for tax treatment involving the issuance of options or shares to a trustee for the benefit of the 69 Table of Contents grantees and also includes an additional alternative for the issuance of options or shares directly to the grantee.
Section 102 includes two alternatives for tax treatment involving the issuance of options or shares to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of options or shares directly to the grantee.
However, in order to ensure our employees located in jurisdictions other than the United States may receive similar benefits under the ESPP, the Committee may, in its sole discretion, establish subplans to the ESPP that may not qualify under Section 423 of the Code. Administration. Our ESPP is administered by the Compensation Committee.
However, in order to ensure our employees located in jurisdictions other than the U.S. may receive similar benefits under the ESPP, the Committee may, in its sole discretion, establish subplans to the ESPP that may not qualify under Section 423 of the Code. Administration. Our ESPP is administered by the Compensation Committee.
Voting Rights Neither our major shareholders nor our directors and executive officers have different or special voting rights with respect to their Ordinary Shares, except that each Class A Ordinary Share is entitled to one vote per share and each Class B 86 Table of Contents Ordinary Share is be entitled to ten votes per share.
Voting Rights Neither our major shareholders nor our directors and executive officers have different or special voting rights with respect to their Ordinary Shares, except that each Class A Ordinary Share is entitled to one vote per share and each Class B Ordinary Share is be entitled to ten votes per share.
Abdessamad also serves as an advisor on the investment advisory committee (IAC) appointed by the United States Secretary of Commerce, Gina Raimondo. Mr. Abdessamad has held multiple executive roles within Hitachi, including CEO of Hitachi Global Digital Holdings, President and CEO of Hitachi Consulting. Mr.
Abdessamad also serves as an advisor on the investment advisory committee (IAC) appointed by the U.S. Secretary of Commerce, Gina Raimondo. Mr. Abdessamad has held multiple executive roles within Hitachi, including CEO of Hitachi Global Digital Holdings, President and CEO of Hitachi Consulting. Mr.
REE no longer grants awards under the REE Automotive Ltd. Key Employee Share Incentive Plan (2011) (the “Existing Plan”), although previously granted awards under the Existing Plan remain outstanding and governed by such plan.
REE no longer grants awards under the REE Automotive Ltd. Key Employee Share Incentive Plan (2011), or the Existing Plan, although previously granted awards under the Existing Plan remain outstanding and governed by such plan.
The annual cash bonus that may be granted to executive officers, other than our Chief Executive Officer, may alternatively be based entirely on a discretionary 78 Table of Contents evaluation. Furthermore, our Chief Executive Officer will be entitled to approve performance objectives for executive officers who report to him.
The annual cash bonus that may be granted to executive officers, other than our Chief Executive Officer, may alternatively be based entirely on a discretionary evaluation. Furthermore, our Chief Executive Officer will be entitled to approve performance objectives for executive officers who report to him.
For these purposes, a controlling shareholder is any shareholder that has the ability to direct the company’s actions, including any shareholder holding 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights in the company.
For these purposes, a controlling shareholder is any shareholder that has the ability to direct the company’s actions, including any shareholder holding 25% or more of the voting rights if no 101 Table of C ontents other shareholder owns more than 50% of the voting rights in the company.
Board practices Board of Directors Under the Companies Law and REE’s Amended and Restated Articles of Association (the “Amended and Restated Articles”), our business and affairs will be managed under the direction of our board of directors.
Board practices Board of Directors Under the Companies Law and REE’s Amended and Restated Articles of Association, or the Amended and Restated Articles, our business and affairs will be managed under the direction of our board of directors.
Ordinary Shares subject to awards granted under the Existing Plan that expire or become unexercisable without having been exercised in full will become available again for future grant under the 2021 REE Automotive Ltd. Share Incentive Plan (the “2021 Plan”).
Class A Ordinary Shares subject to awards granted under the Existing Plan that expire or become non-exercisable without having been exercised in full will become available again for future grant under the 2021 REE Automotive Ltd. Share Incentive Plan (the “2021 Plan”).
The maximum number of Class A Ordinary Shares available for issuance under the 2021 Plan is equal to the sum of (i) 771,421 Class A Ordinary Shares, (ii) any shares subject to awards under the Existing Plan which have expired, or were cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or became unexercisable without having been exercised, and (iii) an annual increase on the first day of each year beginning in 2022 and on January 1st of each calendar year thereafter during the term of the Plan, equal to the lesser of (A) 5 % of the outstanding Class A Ordinary Shares on the last day of the immediately preceding calendar year and (B) such amount as determined by REE’s board of directors if so determined prior to January 1 of a calendar year.
The maximum number of Class A Ordinary Shares available for issuance under the 2021 Plan is equal to the sum of (i) 771,421 Class A Ordinary Shares (as adjusted following the 1-for-30 reverse share split), (ii) any shares subject to awards under the Existing Plan which have expired, or were cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or became non-exercisable without having been exercised, and (iii) an annual increase on the first day of each year beginning in 2022 and on January 1st of each calendar year thereafter during the term of the Plan, equal to the lesser of (A) 5% of the outstanding Class A Ordinary Shares, as determined on a fully diluted basis, as of the last day of the immediately preceding calendar year and (B) such amount as determined by REE’s board of directors if so determined prior to January 1 of a calendar year.
Pursuant to regulations promulgated under the Companies Law, companies which do not have a “controlling shareholder,” with shares traded on certain U.S. stock exchanges including Nasdaq, may, subject to certain conditions, “opt out” from the Companies Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors.
Pursuant to regulations promulgated under the Companies Law, companies which do not have a “controlling shareholder,” with shares traded on any stock exchange outside of Israel including Nasdaq, may, subject to certain conditions, “opt out” from the Companies Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors.
As of December 31, 2023, we had 244 employees and external consultants deployed to REE on a full-time equivalent (“FTE”) 2 basis located in the following geographic locations: December 31, 2023 December 31, 2022 December 31, 2021 Israel 112 133 127 United Kingdom 111 134 119 United States 16 18 14 Germany 3 3 5 Other 2 3 5 244 291 270 The following table shows the breakdown of our global workforce of employees and external consultants deployed to REE on an FTE basis by category of activity as of the dates indicated: December 31, 2023 December 31, 2022 December 31, 2021 General and administrative 50 59 39 Selling and Marketing 11 16 16 Research and development 183 216 215 244 291 270 In regard to our Israeli employees, Israeli labor laws govern the length of the work day, minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination of employment, equal opportunity and anti-discrimination laws and other conditions of employment.
As of December 31, 2024, we had 211 employees and external consultants deployed to REE on a full-time equivalent (“FTE”) 2 basis located in the following geographic locations: December 31, 2024 December 31, 2023 December 31, 2022 Israel 92 112 133 United Kingdom 100 111 134 United States 15 16 18 Germany 3 3 3 Other 1 2 3 211 244 291 The following table shows the breakdown of our global workforce of employees and external consultants deployed to REE on an FTE basis by category of activity as of the dates indicated: December 31, 2024 December 31, 2023 December 31, 2022 General and administrative 43 50 59 Selling and Marketing 8 11 16 Research and development 3 160 183 216 211 244 291 In regard to our Israeli employees, Israeli labor laws govern the length of the work day, minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination of employment, equal opportunity and anti-discrimination laws and other conditions of employment.
The maximum amount set forth in such agreements is in addition to any amount paid (if paid) under insurance and/or by a third party pursuant to an indemnification arrangement.
The 103 Table of C ontents maximum amount set forth in such agreements is in addition to any amount paid (if paid) under insurance and/or by a third party pursuant to an indemnification arrangement.
As of December 31, 2023, there were a total of 3,459,972 Class A Ordinary Shares subject to outstanding awards granted under the 2011 Plan, which if expired, cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or otherwise unexercisable without having been exercised, will become available for issuance under the 2021 Plan. Administration.
As of December 31, 2024, there were a total of 3,416,677 Class A Ordinary Shares subject to outstanding awards granted under the 2011 Plan, which if expired, cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or otherwise non-exercisable without having been exercised, will become available for issuance under the 2021 Plan. Administration.
Avital Futterman Avital Futterman joined REE in July 2022. Prior to REE, Ms. Futterman served as the VP of Legal Affairs and General Counsel from 2015 through 2022 at Cellebrite, a leading digital intelligence high-tech company. Before that, Ms. Futterman worked at Zellermayer, Pelossof & Co. and SGS as an attorney. Ms.
Futterman served as the VP of Legal Affairs and General Counsel from 2015 through 2022 at Cellebrite, a leading digital intelligence high-tech company. Before that, Ms. Futterman worked at Zellermayer, Pelossof & Co. and SGS as an attorney. Ms.
Awards. The 2021 Plan provides for the grant of stock options (including incentive stock options and nonqualified stock options), Ordinary Shares, restricted shares, restricted share units, stock appreciation rights, other cash-based awards and other share-based awards.
Awards. The 2021 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), Class A Ordinary Shares, restricted shares, restricted share units, stock appreciation rights, other cash-based awards and other share-based awards.
Rose serves on the board of directors of Lincoln Educational Services Corporation (Nasdaq: LINC) since August 2020. A native of Marion, Indiana, Mr. Rose is an automotive engineering graduate of the Indianapolis campus of Lincoln Technical Institute, now Lincoln College of Technology. Michal Drayman has served on the board of directors since April 2023. Ms.
Rose serves on the board of directors of Lincoln Educational Services Corporation (Nasdaq: LINC) since August 2020. A native of Marion, Indiana, Mr. Rose is an automotive engineering graduate of the Indianapolis campus of Lincoln Technical Institute, now Lincoln College of Technology. Ittamar Givton has served on the board of directors since March 29, 2023. Mr.
Ittamar Givton has served on the board of directors since March 29, 2023. Mr. Givton served on the boards of several government entities and public companies in Israel, across the energy, banking, chemical, and communication sectors as well as on the board of the Israeli Stock Exchange. In addition, Mr.
Givton served on the boards of several government entities and public companies in Israel, across the energy, banking, chemical, and communication sectors as well as on the board of the Israeli Stock Exchange. In addition, Mr.
With respect to its employees in the United States, the ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code and the ESPP will be interpreted in a manner that is consistent with that intent.
With respect to its employees in the U.S., the ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the 91 Table of C ontents Code and the ESPP will be interpreted in a manner that is consistent with that intent.
Abdessamad holds a Bachelor of Science degree in Computer Engineering from Suffolk University, Massachusetts, and has completed the Executive Development Program at the Tuck School of Business at Dartmouth College in New Hampshire, and the Executive Leadership Program at the International Institute of Management Development (IMD) in Lausanne, Switzerland.
Abdessamad holds a Bachelor of Science degree in Computer Engineering from Suffolk University, Massachusetts, and has completed the Executive Development Program at the Tuck School of Business at Dartmouth College in New Hampshire, and the Executive Leadership Program at the International Institute of Management Development (IMD) in Lausanne, Switzerland. Rajesh Goel joined our board of directors on November 15, 2024.
Our board of directors has determined that each member of our audit committee is independent, as such term is defined in Rule 10A3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members.
See Item 16A of this Form 20-F for further information. Our board of directors has determined that each current member of our audit committee is independent, as such term is defined in Rule 10A3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members.
The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these Ordinary Shares were held by brokers or other nominees.
The number of record holders in the U.S. is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident because many of these Class A Ordinary Shares were held by brokers or other nominees.
Notwithstanding any of the foregoing, if a grantee’s employment or services with REE or any of its affiliates is terminated for “cause” (as defined in the 2021 Plan), all outstanding awards held by such grantee (whether vested or unvested) will 73 Table of Contents terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2021 Plan.
Any awards which are unvested as of the date of such termination or which are vested but not then exercised within the twelve months period following such date, will terminate and the shares covered by such awards shall again be available for issuance under the 2021 Plan. 94 Table of C ontents Notwithstanding any of the foregoing, if a grantee’s employment or services with REE or any of its affiliates is terminated for “cause” (as defined in the 2021 Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2021 Plan.
Compensation Compensation of Executive Officers and Directors The compensation paid by REE and our subsidiaries to our office holders as a group for the year ended December 31, 2023 was $6.0 million.
Compensation Compensation of Executive Officers and Directors The compensation paid by REE and our subsidiaries to our executive officers and directors as a group for the year ended December 31, 2024 was $4.3 million.
Our board of directors adopted a compensation committee charter setting forth the responsibilities of the committee, which are consistent with Nasdaq corporate governance rules and include: • recommending to our board of directors for its approval a compensation policy, in accordance with the requirements of the Companies Law, as well as other compensation policies, incentive-based compensation plans, and equity-based compensation plans, overseeing the development and implementation of such policies, and recommending to our board of directors any amendments or modifications the committee deems appropriate, including as required under the Companies Law; 77 Table of Contents • reviewing and approving the granting of options and other incentive awards to our Chief Executive Officer and other executive officers, including reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, including evaluating their performance in light of such goals and objectives; • approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law; and • administering our equity-based compensation plans, including without limitation, approving the adoption of such plans, amending and interpreting such plans, and the awards and agreements issued pursuant thereto, and making and determining the terms of awards to eligible persons under the plans.
Compensation Committee Role In accordance with the Companies Law, the responsibilities of the compensation committee are, among others, as follows: • making recommendations to the board of directors with respect to the approval of the compensation policy for office holders and, once every three years, with respect to any extensions to a compensation policy that was adopted for a period of more than three years; • the implementation of the compensation policy and periodically making recommendations to the board of directors with respect to any amendments or updates to the compensation policy; • resolving whether to approve arrangements with respect to the terms of office and employment of office holders; and • exempting, under certain circumstances, a transaction with our Chief Executive Officer from the approval of our shareholders. 98 Table of C ontents Our board of directors adopted a compensation committee charter setting forth the responsibilities of the committee, which are consistent with Nasdaq corporate governance rules and include: • recommending to our board of directors for its approval a compensation policy, in accordance with the requirements of the Companies Law, as well as other compensation policies, incentive-based compensation plans, and equity-based compensation plans, overseeing the development and implementation of such policies, and recommending to our board of directors any amendments or modifications the committee deems appropriate, including as required under the Companies Law; • reviewing and approving the granting of options and other incentive awards to our Chief Executive Officer and other executive officers, including reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, including evaluating their performance in light of such goals and objectives; • approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law; and • administering our equity-based compensation plans, including without limitation, approving the adoption of such plans, amending and interpreting such plans, and the awards and agreements issued pursuant thereto, and making and determining the terms of awards to eligible persons under the plans.
The annual retainer for serving as chair of the audit committee, the compensation committee and the nominating and corporate governance committee is $20,000, $15,000 and $10,000, respectively. To this date, REE has no nomination committee. Initial equity awards.
The annual retainer for serving as chair of the audit committee, the compensation committee and the nominating and corporate governance committee is $20,000, $15,000 and $10,000, respectively. REE currently does not have a nomination committee. Initial equity awards.
The maximum number of shares of our common shares available for issuance under the ESPP initially shall not exceed in the aggregate 154,284 Class A Ordinary Shares.
The maximum number of shares of our ordinary shares available for issuance under the ESPP initially shall not exceed in the aggregate 154,284 Class A Ordinary Shares (as adjusted following the 1-for-30 reverse share split).
Steinberg. 75 Table of Contents Audit Committee Under Nasdaq corporate governance rules, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise. Our audit committee consists of Michal Marom-Brikman, Ittamar Givton, Alla Felder and Michal Drayman.
Audit Committee Under Nasdaq corporate governance rules, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise.
Compensation Committee Under Nasdaq corporate governance rules, we are required to maintain a compensation committee consisting of at least two independent directors. Our compensation committee consists of Michal Marom-Brikman, Ittamar Givton, Alla Felder and Michal Drayman. Ms.
Compensation Committee Under Nasdaq corporate governance rules, we are required to maintain a compensation committee consisting of at least two independent directors. Prior to the Meeting, our compensation committee consisted of Michal Marom-Brikman, Ittamar Givton, Alla Felder, Hicham Abdessamad, and Michal Drayman. During that period, Ms. Alla Felder served as chairperson of the compensation committee.
Companies Law Requirements Under the Companies Law, the board of directors of a public company must appoint a compensation committee. We have elected to “opt out” from additional Companies Law requirements relating to the size and composition of the compensation committee.
We have elected to “opt out” from additional Companies Law requirements relating to the size and composition of the compensation committee.
The expiration date of such options is 10 years after their date of grant. The table below sets forth the compensation earned by our five most highly compensated office holders (as defined under the Companies Law) during or with respect to the year ended December 31, 2023.
The table below sets forth the compensation earned by our five most highly compensated office holders (as defined under the Israeli Companies Law) during or with respect to the year ended December 31, 2024.
Our directors will generally be elected by a simple majority vote of holders of Ordinary Shares, participating and voting (in person or by proxy) at an annual general meeting of our shareholders.
Under the Amended and Restated Articles the number of directors on our board of directors will be no less than three and no more than eleven. Our directors will generally be elected by a simple majority vote of holders of Ordinary Shares, participating and voting (in person or by proxy) at an annual general meeting of our shareholders.
(2) All current officers listed in the table are full-time employees. Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2023. (3) Amounts reported in this column include benefits and perquisites, including those mandated by applicable law.
Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the conversion rate on the payment date of the compensation. (3) Amounts reported in this column include benefits and perquisites, including those mandated by applicable law.
Each member of our audit committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq corporate governance rules. Our board of directors has determined that Ms. Marom-Brikman and Ms. Felder are audit committee financial experts as defined by the SEC rules.
Prior to the Meeting, our audit committee consisted of Michal Marom-Brikman, Ittamar Givton, Alla Felder and Michal Drayman and each member met the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq corporate governance rules. Previously, our board of directors determined that Ms. Marom-Brikman and Ms.
Tech holds a Cert of Supervisory Management from University of Pittsburgh, a Quality Engineering from Tri County Technical College, a BS of Mechanical Engineering from Penn State University, a BA of Business Administration from Madison University and an MBA of Business Administration from Madison University. Keren Shemesh has been Chief Marketing Officer of REE since September 2019.
Tech holds a Cert of Supervisory Management from University of Pittsburgh, a Quality Engineering from Tri-County Technical College, a BS of Mechanical Engineering from Penn State University, a BA of Business Administration from Madison University and an MBA of Business Administration from Madison University. Avital Futterman Avital Futterman joined REE in July 2022. Prior to REE, Ms.
The percentage of Ordinary Shares beneficially owned is computed on the basis of 10,827,570 Class A Ordinary Shares and 2,780,570 Class B Ordinary Shares outstanding as of March 12, 2024. Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Ordinary Shares beneficially owned by them.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Ordinary Shares beneficially owned by them.
In the opinion of the SEC, indemnification of directors and office holders for liabilities arising under the Securities Act, however, is against public policy and therefore unenforceable. 82 Table of Contents Compensation of Directors and Executive Officers Directors Under the Companies Law, the compensation of a public company’s directors requires the approval of (i) its compensation committee, (ii) its board of directors and, unless exempted under regulations promulgated under the Companies Law, (iii) the approval of its shareholders at a general meeting.
Compensation of Directors and Executive Officers Directors Under the Companies Law, the compensation of a public company’s directors requires the approval of (i) its compensation committee, (ii) its board of directors and, unless exempted under regulations promulgated under the Companies Law, (iii) the approval of its shareholders at a general meeting.
For additional information about our dual class structure, see Exhibit 2.6 to this Annual Report, which is incorporated by reference herein. B. Related party transactions. Our policy is to enter into transactions with related parties on terms that, on the whole, are no more favorable, or no less favorable, than those available from unaffiliated third parties.
Related party transactions Our policy is to enter into transactions with related parties on terms that, on the whole, are no more favorable, or no less favorable, than those available from unaffiliated third parties.
The role of the internal auditor, among other things, is to review the company’s compliance with applicable law and orderly business procedure.
Internal Auditor Under the Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee. The role of the internal auditor, among other things, is to review the company’s compliance with applicable law and orderly business procedure.
Section 102 allows employees, directors and officers who are not controlling shareholders and who are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options under certain terms and conditions.
The Existing Plan provides for granting awards under various tax regimes, including in compliance with Section 102 (“Section 102”) of the Israeli Income Tax Ordinance (New Version), 5721-1961, or the “Ordinance, and Section 3(i) of the Ordinance. 90 Table of C ontents Section 102 allows employees, directors and officers who are not controlling shareholders and who are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options under certain terms and conditions.
Marom-Brikman served as chairperson of the compensation committee and on March 25, 2024, the Board appointed Alla Felder to serve as chairperson of the compensation committee. Our board of directors has determined that each member of our compensation committee is independent under Nasdaq corporate governance rules, including the additional independence requirements applicable to the members of a compensation committee.
Our board of directors has determined that each current member of our compensation committee is independent under Nasdaq corporate governance rules, including the additional independence requirements applicable to the members of a compensation committee. Companies Law Requirements Under the Companies Law, the board of directors of a public company must appoint a compensation committee.
Major shareholders 2 Number of external consultants deployed to REE is calculated on a full-time equivalent basis. External consultants are converted to full-time equivalents by dividing their actual working hours per month by a full-time standard.
External consultants are converted to full-time equivalents, or FTE, by dividing their actual working hours per month by a full-time standard.
Participants may withdraw from an offering at any time prior to the last day of the offering period by submitting a revised enrollment form indicating his or her election to withdraw at least 15 days before the purchase date.
Participants may withdraw from an offering at any time prior to the last day of the offering period by submitting a revised enrollment form indicating his or her election to withdraw at least 15 days before the purchase date. 92 Table of C ontents The accumulated payroll deductions held on behalf of the participant in his or her notional account will be paid to the participant promptly following receipt of the participant’s revised enrollment form indicating their election to withdraw, and the participant’s option will be automatically terminated.
All other executive officers are appointed by the Chief Executive Officer, subject to applicable corporate approvals, and shall be subject to the terms of any applicable employment or consulting agreements. 74 Table of Contents Under the Amended and Restated Articles the number of directors on our board of directors will be no less than three and no more than eleven.
All other executive officers are 95 Table of C ontents appointed by the Chief Executive Officer, subject to applicable corporate approvals, and shall be subject to the terms of any applicable employment or consulting agreements.
As of December 31, 2023, 2022 and 2021 we had 11, 14 and 37 external consultants on an FTE basis deployed to REE, respectively, most of which were located in the United Kingdom. 84 Table of Contents The following table and accompanying footnotes set forth information with respect to the beneficial ownership of our Ordinary Shares, as of March 12, 2024: • each person or entity who is known by us to be the beneficial owner of more than 5% of the outstanding Ordinary Shares; • each of our current executive officers and directors, individually; and • all of our executive officers and directors, as a group.
Major shareholders The following table and accompanying footnotes set forth information with respect to the beneficial ownership of our Ordinary Shares, as of May 7, 2025: • each person or entity who is known by us to be the beneficial owner of more than 5% of the outstanding Ordinary Shares; • each of our current executive officers and directors, individually; and • all of our executive officers and directors, as a group.
Miller led partnerships and M&A at the Nasdaq listed companies M-Systems Ltd. and SanDisk. Ms. Miller holds a BA in Economics from Tel Aviv University and an MBA from INSEAD. Limor Raz has been Chief People Officer of REE since November 2018. Prior to joining REE, she served as Head of HR at Xsight Systems. Ms.
Miller led partnerships and M&A at the Nasdaq listed companies M-Systems Ltd. and SanDisk. Ms. Miller holds a BA in Economics from Tel Aviv University and an MBA from INSEAD. Current Directors Carlton Rose has served on the board of directors since June 2023. Mr.
Share ownership For information regarding the share ownership of our directors and executive officers, please refer to “ Item 6.B. Compensation—Option Plans ” and “ Item 7.A. Major Shareholders. ” F. Disclosure of a registrant’s action to recover erroneously awarded compensation. Not applicable. Item 7. Major Shareholders and Related Party Transactions A.
Disclosure of a registrant’s action to recover erroneously awarded compensation. Not applicable. Item 7. Major Shareholders and Related Party Transactions A.
Summary Compensation Table Information Regarding the Covered Executive (1) Name and Principal Position Base Salary Benefits & Perquisites (3) Variable Compensation (4) Equity-Based Compensation (5) Total Keren Shemesh, Chief Marketing Officer $ 297,000 $ 115,813 $ 74,250 $ 1,871,830 $ 2,358,893 Tali Miller, Chief Business Officer $ 400,000 $ 130,038 $ 333,333 $ 227,936 $ 1,091,307 Limor Raz, Chief People Officer $ 297,000 $ 110,323 $ 74,250 $ 798,192 $ 1,279,765 Yaron Zaltsman, Chief Financial Officer $ 227,419 $ 77,293 $ 150,000 $ 343,801 $ 798,513 Joshua Tech, Chief Operating Officer $ 380,000 $ 61,069 $ 171,000 $ 90,657 $ 702,726 (1) In accordance with Israeli law, all amounts reported in the table are based on the cost to REE as recorded in our financial statements for the year ended December 31, 2023.
Summary Compensation Table Information Regarding the Covered Executive (1) (2) Name and Principal Position Base Salary Benefits & Perquisites (3) Variable Compensation (4) Equity-Based Compensation (5) Total Yaron Zaltsman, Chief Financial Officer $ 262,500 $ 424,859 $ — $ 876,885 $ 1,564,244 Keren Shemesh, Chief Marketing Officer $ 297,000 $ 114,928 $ 74,250 $ 927,189 $ 1,413,367 Tali Miller, Chief Business Officer $ 400,000 $ 121,364 $ 333,333 $ 190,719 $ 1,045,416 Limor Raz, Chief People Officer $ 297,000 $ 101,428 $ 74,250 $ 552,269 $ 1,024,947 Joshua Tech, Chief Operating Officer $ 380,000 $ 34,276 $ 218,400 $ 165,637 $ 798,313 (1) In accordance with Israeli law, all amounts reported in the table are based on the cost to REE as recorded in our financial statements for the year ended December 31, 2024.
Our board of directors has determined that Alla Felder, Michal Drayman, Ittamar Givton, and Michal Marom-Brikman are independent directors as defined in Nasdaq corporate governance rules. As a result of the resignation of Arik Steinberg, we do not currently have a majority of independent members of our board of directors.
Prior to the Meeting, our board of directors determined that Carlton Rose, Alla Felder, Michal Drayman, Michal Marom-Brikman, Ittamar Givton, and Hicham Abdessamad were independent directors, as defined in the Nasdaq corporate governance rules.
These shareholders held in the aggregate 10,501,042 of our outstanding Class A Ordinary Shares, or 97.0% of our outstanding Class A Ordinary Shares as of March 12, 2024.
These shareholders held in the aggregate 26,499,178 of our outstanding Class A Ordinary Shares, or 93.8% of our outstanding Class A Ordinary Shares as of May 7, 2025.
Item 7.B. Related Party Transactions ” of this Annual Report for additional information. 65 Table of Contents chief financial officer of A.D.O. Group Ltd, which was listed on the Tel Aviv Stock Exchange, and its subsidiary A.D.O. Properties S.A., which was listed on the Frankfurt Stock Exchange, from 2006 to 2016. Prior to these roles, from 2000 to 2005, Mr.
Item 7.B. Related Party Transactions ” of this Annual Report for additional information. 86 Table of C ontents until 2017, Mr. Aviv served as Chief Financial Officer of Babylon Ltd., a public company listed on the Tel Aviv Stock Exchange, operating in the fields of internet, software and venture capital investments. Prior to that, from 2005 to 2010, Mr.
Zaltsman was the Deputy Head of Financial Advisory Services Israel for Deloitte. Mr. Zaltsman is a certified public accountant in Israel and holds a BA in accounting and economics from the Hebrew University and a MBA from Tel Aviv University. Joshua Tech joined REE in April 2022 as the Chief Operating Officer. Mr.
Aviv was a manager at Ernst & Young. Mr. Aviv is a Certified Public Accountant and holds a Bachelor of Arts in Business and Accounting from the College of Management Academic Studies, and an MBT in Business and Taxation from the College of Management Academic Studies. Joshua Tech joined REE in April 2022 as the Chief Operating Officer. Mr.
(18) Does not include 62,973 restricted stock units that vest more than 60 days from March 12, 2024. Registered Holders As of March 12, 2024, we had 36 holders of record of our Class A Ordinary Shares in the United States, including Cede & Co., the nominee of The Depository Trust Company.
Registered Holders As of May 7, 2025, we had 36 holders of record of our Class A Ordinary Shares in the U.S., including Cede & Co., the nominee of The Depository Trust Company.

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