SoftWheel

Before changing its name to REE Automotive, the company was called SoftWheel.^[3] SoftWheel was founded in 2011 by Gilad Woolf. Woolf engaged the services of Amihai Gros and the services of Ahishai Sardes of Ziv Av Engineering, who developed a wheelchair wheel with an embedded suspension system.^[4] Daniel Barel joined as CEO in 2013 after learning of the company through Gros.^[5] In 2014 SoftWheel raised three million dollars in an effort to enter the electric bicycle market with its in-wheel selective suspension system, which is stiff while riding on level surfaces, and becomes shock-absorbent upon impacts.^[4][6][7]

Shift to the automotive industry

Faced with its investors potentially pulling funding and shutting down the company, SoftWheel began developing in-wheel shock absorbers for bicycles, motorcycles, and automobiles.^[8] By mid-2017, the company planned to manufacture products for bicycles and develop a product for automobiles, raising a total of 15 million USD, with plans for two more assembly lines in addition to its existing ones for wheelchair wheels in Israel and the United States.^[9] The company raised an additional $25 million in 2018 in an effort to pivot its business to the automotive market,^[10] for a total of $40 million, partly from investors in the automotive industry such as Mitsubishi and Musashi Seimitsu.^[10][11]

Daniel Barel announced the company's new name, REE, at the EcoMotion convention in June 2019, where he unveiled an automotive platform for autonomous delivery vehicles. The name-change signifies "reinventing" the car by discarding the mechanical connections between the wheels in favor of electronic by-wire control.^[12]

Initial stock market financing

The company expected to raise 436 million USD through a special-purpose acquisition company merger with 10X Capital Venture Acquisition Corp, of which $200 million were expected from 10X Capital investors. Three-quarters of the 10X Capital shares were redeemed by investors upon the merger, reducing the raised capital by about $153 million.^[13] A total of $285 million were raised by the company when going public on NASDAQ on July 23, 2021, resulting in about $318 million in cash on-hand, and a valuation of about three billion dollars.^[14] The CEO said that while vertical automotive companies require 20 billion dollars or more to develop their supply chain and manufacturing capabilities, the company is set to achieve serial manufacturing and commercialization of its first product line through its horizontal business alliances using its $300 million in cash.^[15]

Following the merger, REE Automotive's valuation dropped significantly, reaching about $100 million in early 2023.^[16] The company had no substantial revenue by February 2023, when it laid-off 31 employees which were approximately 11% of its workforce.^[17] The company expected in May 2023 that its cash runway will finance its operations past its test fleet deliveries and into the scaling-up of its business.^[18]

Production at scale

After beginning production in 2023, the company raised $24 million and plans to raise a further $10 million in working capital for production in 2024 and for tooling for its scale production in the United States in 2025, alongside a 25% reduction in its cash burn rate in 2023 and a further planned 25% reduction in 2024.^[19] The company then plans to raise a further $50 million in working capital for scale production in 2025 before funding itself on its own earnings by the end of 2025.^[20]

Competition

Small commercial electric vehicle startups like REE Automotive attempted to fill the void in commercial EV offerings left by traditional automotive manufacturers in the late 2010s. The startup companies expected to beat the traditional manufacturers to market, or partner with them, or be acquired by them. The traditional manufacturers have since started to fill the commercial EV void, bringing the small manufacturers into direct competition with them and leading to difficulties in raising funding and generating sales to large customers.^[25][26] This put small manufacturers like Arrival, Canoo, Lordstown, and ELMS in financial difficulties. REE Automotive hopes to overcome these issues with its P7 offerings and its horizontal business model.^[27][26]

Corner modules

The core technology developed by REE Automotive is the corner module. These modules are located directly adjacent to each wheel, housing all of the vehicle's drive systems. The modules are controlled by-wire, eliminating the use of mechanical connections that are traditionally housed throughout the chassis, like a steering column, drive-train, and so on. This design allows for a flat platform chassis with more space for passengers or cargo, and easy replacement of each module.^[12]

Prior to its initial fundraising on the stock market, the company developed five classes of corner modules for different vehicle classes up to 7 tonnes gross vehicle weight.^[28] Following its fundraising shortfall, the company focused on developing and bringing a single product line to market,^[15] based on the P7 corner module for up to 8.9 tonnes gross vehicle weight.

Each P7 corner module houses the following: a wheel-end drive unit co-developed with American Axle consisting of an electric motor with regenerative braking, a transmission, and an inverter; steering actuators developed by Trio; double wishbone suspension with twin dampers; brakes and braking actuators co-developed with Brembo; sensors; and an electronic control unit (ECU) based on Infineon AURIX running REE Automotive software that manages all the systems. A P7 platform includes four corner modules that are controlled in tandem by a central ECU.^[29][30]

Company representatives presented a production-intent P7 corner module in March 2023 at Work Truck Week, saying the module is fastened to the platform on a single plane entirely from the side of the vehicle, with no special tools.^[31] The P7 platform's four corner modules are interchangeable, simplifying manufacturing and maintenance. A module may be removed and a new module fastened to the platform in 20 minutes, with a further 40 minutes of calibration for the vehicle to become operational again.^[32]

Prototypes and concept cars

Manufacturing

The P7 assembly line was fully built-out by March 2023.^[51] The assembly line is divided into automated and manual stations, with the corner modules being carried from one station to the next on autonomous robots. The assembled modules are then attached to a platform chassis, and finally a chassis body is attached. The company's first manufacturing facility was established in 2022 in Coventry, United Kingdom.^[23] The first US production facility in Greater Austin, Texas, was scheduled to begin operations in 2023,^[52] but the build-out of the US production capacity has been delayed as a cost-reduction measure to late 2024 or early 2025, when mass-manufacturing is expected to commence.^[19] Each facility is designed to initially produce corner modules for up to 10,000 vehicles a year with a single daily work shift.^[32] Twenty-five production-intent test vehicles have been manufactured in 2023 for internal validation.^[51] The first production P7-C intended for customers was driven off the production line in December 2023.^[53]

Sales

The first P7 vehicles obtained FMVSS certification and were received by customers in early 2024.^[54] The company had orders for approximately 150 vehicles by August 2023, and expects to sell 300 vehicles in 2024 and thousands of vehicles in 2025. The company expects break-even for BOM on the sale of 300 vehicles, and positive EBITDA in 2025 with mass-manufacturing in the United States.^[20]