Good day, and thank you for standing by. Welcome to the REE Automotive Q3 2023 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one, one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kamal Hamid, Vice President of Investor Relations. Please go ahead. Thank you, operator, and thank you all for joining our third quarter 2023 conference call. I hope that you've now seen our press release and shareholder letter issued earlier this morning at investors.ree.auto. If you haven't, I encourage you to review it as it has additional insights into the topics we'll talk about on the call today. I would like to remind you that today's call may include forward-looking statements. Any statements describing our beliefs, goals, plans, strategies, expectations, projections, forecasts, and assumptions are forward-looking statements. Please note that the company's actual results may be different from anticipated by such forward-looking statements for a variety of reasons, many of which are beyond our control, such as the ongoing military conflict in Israel. Please refer to the company's Form 20-F, filed on March 28th, 2023, with the Securities and Exchange Commission, which identifies principal risks and uncertainties that could affect our business, prospects, and future results. We assume no obligation to publicly update any forward-looking statements except as required by law. In addition, we will be discussing or providing certain non-GAAP financial measures today, including non-GAAP net loss and non-GAAP operating expenses. Please see our shareholder letter for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. I will now hand the call over to Daniel Barel, our CEO and Co-Founder. Thank you, Kamal. Hello, everybody, and thank you for joining us today. I'm pleased to share that we have had a strong third quarter. We continue to see strong market demand for the P7, which was converted into the extension of our authorized dealer network and North American footprint, which now stands at 20 partners and more than doubling our initial order book value to $43 million in the last three months. As evidenced by our achievements this quarter, we continue to receive strong positive market feedback on our unique P7 vehicle, with a robust feature set, value proposition, and low total cost of ownership. The first batch of customer demo trucks are in advanced stages of build, and we are on track to finalizing our FMVSS and CARB certification, which follows our recent EPA approval and X-by-Wire certification feasibility. We expect to ship the first demo units to our customers by Christmas. Support is a critical part in commercial trucks. Therefore, we have built a strong customer experience team who will work together with and support our customers as they put our vehicles to the test in their fleets. As we grow our order book, we continue to strengthen our balance sheet with additional selective financing. These efforts are part of our risk-averse plan to secure in advance the working capital funding required to produce the expected binding orders of our growing order book. I am particularly encouraged by the continued confidence and support from our shareholders, which have resulted in a capital raise of $8 million with favorable terms, led by a long-standing institutional investor in a very challenging environment, as we shared a couple of days ago. Operationally, we continue to demonstrate strong financial discipline by remaining on track while decreasing our year-over-year GAAP net loss by 28%, partly because of the efficiencies we implemented around R&D and SG&A, as well as government grants received. We believe we are scaling up responsibly, building vehicles to order and not for inventory, as we work to bring our production tooling online. We currently plan to have this operational by the end of 2024, which we believe will enable us to reach Bill of Materials breakeven on the first scale production batch. In line with our philosophy of complete, not compete, we are in advanced stages of nominating a U.S. contract manufacturer to assemble our P7 lineup in the U.S. to help us facilitate economical mass production. We believe we will be able to scale production up to a rate of four-six trucks a day by the end of 2024, with a max capacity of up to 5,000 trucks per year. We look forward to providing you with an update on this soon. Before we open for questions today, I wanted to end with this. In the past three years, we've seen a pandemic, challenging market conditions, and now war. But today, more than ever, we are strong, focused, and committed to deliver no matter what. It is so inspiring to see our teams around the world working together as one to continue delivering, especially with the recent war in Israel, which affects us all in different ways, but is not expected to have a material impact on our operations. Our teams in the U.K. and the U.S. are supporting our people in Israel, and we are thankful for the hundreds, if not thousands, of messages of support we have received from our partners, customers, suppliers, shareholders, and even people we have never met or done business with before. Your support is everything. As ever, I thank you all for your continued good wishes. We recently held a very productive Q&A session with our retail investors. We have invited our retail investors to share their questions for this quarter. Today, in addition to analysts' question, we will also answer several of the retail investors' questions. Therefore, I would like to open the call for questions, where we will be joined by our Chief Financial Officer, Yaron Zaltsman, our Chief Business Officer, Tali Miller, and our Chief Operating Officer, Josh Tech. Operator, you can now open the line for questions. Thank you. As a reminder, if you wish to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. We will now take the first question. It's coming from the line of Mike Shlisky from D.A. Davidson & Co. Please go ahead. Yes, hello, good morning. And thanks for taking my question. I'm glad everyone's safe over there in Israel, at least. Then, so I want to ask quickly about some of the comments you made about having a third-party contractor doing the production to start. Could you just, could you just clarify, are they just going to be doing the corners, and then you'll be building the actual vehicle itself within a REE facility, or are they going to be building the whole thing? Can you kinda, kinda just give us an overview of how it's going to work at this point? Hey, Mike, good morning. Thank you for the kind wishes. Yeah, on the contract manufacturer, I think it's very simple. The core technology for REE is our by-wire technology, right? The REE corners. That remains within REE and will always remain within REE. The contract manufacturer will be assembling a full truck, whether it's gonna be, you know, a cab chassis, a stripped chassis, or a full truck, Powered by REE, and that will be in the U.S. So the full assembly will be done in the U.S. The corners will be shipped from the U.K., from our already set integration center. I see. So it's the, it's the other way around. They'll be receiving fully assembled, ready-to-go corners from you, and they'll be the ones- Correct. I get it. Thank you. Perfect. Perfect. And then I wanted to clarify some of your comments that you mentioned, how you're going to be, you know, building to order and not building to inventory. I guess when you say inventory, do you mean you won't be building final products that will be on REE's books, and there will be inventory at the dealership level? Or will nobody have inventory? REE won't have inventory at the normal dealers unless they're specifically ordered from the customer. Well, yeah. So when we say we're building to order, it means that we're building only for binding orders that we're receiving. So our customers can have, of course, they would need to have some sort of inventory, especially our dealers for our growing dealer network in the U.S. They'll have an inventory of trucks, but REE itself is not gonna be building inventory, sitting up in parking lots, waiting for vehicles to be taken. We're building only for the orders that we are accepting from our customers. Did that answer your question? Just to be sure. Yeah. Got it. Perfectly, yes. Yes. Yeah. Maybe one last one from me. Have you got any change in tone from any of your California customers in the last quarter or so? I mean, at this point, they're a month away from being forced to adopt EVs. Are they asking you about, like, January first delivery dates, if possible? Or I don't know if you could deliver at that time, but are they asking in a more urgent manner for their, you know, vehicles? Yeah, we see very, very strong demand across the U.S., but of course, also in California. We've also seen yesterday a change more relevant to smaller fleets in California on the level of payment that they can receive a reimbursement. But maybe, Tali, you want to clarify and add something more on that? Yeah, sure. Thanks, Mike, for this question. It's a good opportunity to share with you that, we definitely see very strong demand for the Powered by REE vehicles. We see our customers, so the dealers as well as the fleets, are anxious to receive our demo vehicles because they see the advantages of the technology, the Powered by REE X-by-Wire technology, with the different advantages of the operation efficiency, safety, and others. We see this demand in California, but not only, so across U.S. and Canada. Okay, I'll leave it there, and again, my best wishes to everyone. Stay safe. Thank you. Thank you. Thank you. We will now take the next question from the line of Colin Langan from Wells Fargo. Please go ahead. Oh, great! Thanks for taking my questions. Just want to follow up. In the press release, you talk about a grant that helped Q3 results. Any sense of how much that helped? And then is that sustainable, or is that gonna continue, or is that just a one-time thing? Hi, Colin. Good morning. It's Yaron here. So the grants are following with us this year, and they will be with us also next year. We cannot give too much information about the amount, but it's not a meaningful amount. But it will stay in the same phase as we are right now, also in the next quarters going forward. Sorry, it would, it would be in the next quarters going forward? So also for next year, we still expect to get the grant from the government. So, is it a continuing every quarter, or is it just you get once a year, you'll get this grant? No, no. It's part of the plan that we are getting a for this year and also for next year. The payment is depending on the timing, but in general, it's existing plan that also following us for next year. Okay, got it. And then the press release also mentions that you, you need $20 million of funding to execute your 2024 plan. When do you need to get that funding by? Is that, you know, by midyear next year? Is that by January 1 that you need to get that $20 million? And what are your current options to get that needed funding? So it's our decision when to take it, right? It's based on the way that we prefer to work. We want to be on the safe side all the time. We reported right now that we have a liquidity of $100 million, and that is before the additional $8 million that we raised after, at the end of the quarter. So it's not that we need money tomorrow morning, or we have any issue of liquidity at all, but generally speaking, we want to be always on the safe side when we are planning the next year ahead. And when we want to make sure that we have all the capital and all the money we need upfront before we are starting the mass production in the U.S. Will you be able to hit your target of getting capacity ramp by the end of next year without the $20 million? No. Or would that be delayed? No, no, no. In order to ramp up, to the amount of size that we want to, we will need to raise over the next year the additional funding of $20 million. Okay. Okay. And then just in general, if maybe you could just remind us, how should we think about the multi-year outlook of sort of volume growth you're expecting? So you talk about breakeven, but that's in the low hundreds, and then we kind of progress to the low thousands over the next few years? So I think we need to divide it to the breakeven on the gross margin and then positive EBITDA in general. So in order to have a breakeven on the gross margin or on the BOM level, we need the low hundreds of vehicles. This is the way that we have planned based on our CapEx-light model. In order to be in a positive EBITDA, which means in general, a positive cash flow as a company, we need to gain low thousands of vehicles in order to be on that phase. And when you're thinking low thousands to be a couple of years out, or? So I think, our plan as we said to the market, that we plan to be in the low thousand vehicle, somewhere in the year 2025, which means we are aiming to be in the break-even EBITDA in the last quarter of year 2025. Okay, great. All right. Thanks for taking my questions. Of course. Thank you. We will now take the next question from the line of Jeff Osborne from TD Cowen. Please go ahead. Yeah, thank you. Good afternoon, Daniel. I was wondering if you could just be more specific on the FMVSS and CARB timing. Is that something you would expect in the next month or two? And then, I'm just trying to understand, once that's achieved, you know, how quickly we should anticipate a final nomination of a contract manufacturer to be named, and then, you know, once that is named, how quickly they could ramp up? Yeah, of course, and good morning. Thank you. And these are actually two great questions because they also came quite high with our retail question that we received, so good opportunity to answer that as well. So to your first question on cert, I'll start and probably Josh can step in. We're planning to deliver the first pilot vehicles, demo vehicles to customers or ship them actually this year. That means we intend to claim cert this year, as in 2023, before we ship, right? Because you can't ship them without. So that's how quickly we're talking about, and we're in the very last stages of doing that, and that's on the heels of, you know, the previously announced X-by-Wire certification feasibility, FMVSS cert, certification feasibility that, you know, was a very big milestone that we had. And I think last quarter. So that's on your first question. On the second one, bless you. On the second one, I think we wanna be nominating the CM early next year, because we want to start ramping up, as we said, towards the end of the year when the production tooling comes online. But Josh, do you wanna shed some more color on that, maybe? Yeah, yeah. So on the CM, again, we're on the final stages of negotiations with very capable partners to assemble the P7 in the U.S. Again, keep in mind, we're on a CapEx-light strategy, both internally and with the CM. So, to get to four-six trucks a day, it's very light investment. You know, it'll still be heavily manual assembly with the technical tooling for traceability, quality, and things like that. So, yeah, we believe that as long as we're nominating, you know, by Q1, we can easily get up to that plan at a CM. So, and we'll be announcing that as ASAP and to everybody. That's helpful, Josh. And then the $20 million of expenditures needed—is any of that for the CM? Or is that once the CM's named, that tooling is put in place, that I assume any CapEx is on their dime in exchange for a commitment? I'm just trying to understand sort of the timing of when that $20 million is needed, similar to Colin's question. Hi, it's Yaron here again. So the funding of $20 million is mainly for the CapEx investment in the tooling. In general, we have enough resources to start to make all the investment without raising the funding, right? We have $100 million, as we just reported. The general issue for us is to raise additional funding, not because we don't have money for the tooling, just because we wanna pay also the BOM cost upfront and to be always on the safe side and not to get any risk at all, when we are starting the mass production. So in general, we would like to do it as fast as we can, but it's always depending on the situation in the market. It's not that we have any issue that we need to do it tomorrow morning. We'll do it, over time, based on the market condition. Got it. My last question is just as Carlton on the Board and Tali and the team are out speaking to fleets, what readiness do they have on charging? You know, you're hearing stories of 12- and 18-month delays in putting in charging infrastructure. So it's great that you have all the dealers, but as the dealers look to sell directly to fleets, or you're approaching fleets direct as well, are they already going through the process of putting in charging requests with their local utilities given the interconnection delays? Or is that a potential roadblock that might stunt growth in the second half of the year? Yeah, great, great question, and the answer is yes. As I said, we're building to order, which means that all of our very much expected trucks are being awaited for, right? And we make sure that both the dealers and their customers are fully prepared to receive them. It makes no sense for anybody for any truck to be sit idle without the ability to charge. So we're in very close relationship and contact with our dealers and their customer, through the dealers, and to the fleet customer, through the dealers, in order to understand what is their level of readiness. Some have capabilities in-house, some use our capabilities to connect them to our partners in charging, which we also said publicly a while ago, and we're helping them get the right charges in place. But we're definitely prioritizing, predominantly, those who are ready to receive EVs. Perfect. That's all I had, Daniel. Thank you. Pleasure. Thank you. Thank you. One moment, please. We will now take the next question from the line of Andres Sheppard from Cantor Fitzgerald. Please go ahead. Hi, good morning. Good afternoon, Daniel. Thanks for taking our question. Congrats on the quarter, and again, I echo everyone's best wishes. Just maybe quickly, you mentioned in here you were chosen for a multiyear program with an aerospace company. Just wondering if you might be able to give us a few more details there as to what it entails and how you see that one ramping up. Thank you. Of course. Thank you, and good morning. So, you know, we can't provide any more details beyond what we've shared, and I am looking forward to sharing more soon. I can say that we have seen I, I can say it's an autonomous program, and we've seen an uptake in autonomous program that we're looking into recently. I think that being, you know, the, I would say, to our best knowledge, the most mature by-wire commercial player out there, gives us the ability to support autonomy very well through our by-wire system. And through those, a few tests that we've run recently with several parties, I think the feedback is that they like what they see. The testing is successful, the implementation of by-wire and AD is successful. The integration is rather straightforward, which is important. And I think that speaks volumes of itself, and we'll share definitely more when we can. We're very excited by that. Got it. Thank you, that's very helpful. Maybe as a second question, I wanted to come back to the roadmap, the two phases roadmap that you provided last quarter. I just wanted to confirm, you are still targeting about $1 billion in cumulative sales between 2024 and 2026? Is the goal there, I think in the past you had mentioned targeting break-even gross margins by the end of 2024. Just wanted to see if any changes there, or if that's still the case. Thank you. Hi, it's Yaron again. So currently, we are not changing the target. We don't see any reason to change any information we gave until now for the market, and we are working based on the plan. Just as a reminder, when we are talking about $1 billion revenues, we are talking about thousands of vehicles. This is what is needed in order to reach that amount of sales. And when we are talking about breakeven, it's on the low hundreds of vehicles, and we plan to start the mass production in the U.S. by the end of Q2 2024. When we start it, already on the first batch, we should have a breakeven gross margin. As we are increasing the production going to Q2 2025 onwards, we'll go also to be in a, we are aiming to be in also a positive EBITDA, in the last quarter of Q2 2025. Yeah, maybe I'll add to that. Thanks, Yaron. Maybe I'll add to that just two things, two points. One, we see very strong demand, and I think, you know, being able to demonstrate that we more than doubled our order book value in just three months speaks for itself. But, the fact there is very strong demand actually, we believe it makes it even more important to scale up responsibly, and do it in a very, you know, deliberate manner. So the idea is that we wanna go and start a demo program and make sure that we've reached and touched the right points with the voice of the customers, and the customers have the ability to try it and like it, right? We feel comfortable, confident that they will, from the relationship that we have. Then, we're gonna ramp up towards the second half of next year and then last quarter, where our production truly comes online. And again, that's deliberate, as we said earlier, because this is that we expect would allow us to reach material break even, which is important because it means that we're not losing money on the production of each vehicle from the beginning. And if we're doing low hundreds in a quarter, that naturally means we can do low thousands with more or less the same production rate over a year, right? In 2025. That would allow us, we believe at this point in time, that by the end of 2025, to get to, like Yaron said, EBITDA break even, and generating cash flow. Got it. That's very helpful, guys. And maybe one last one for me. I know we touched on this before, but the $20 million in external funding, any sense of whether that would be something to do in the first half versus the second half of next year? And how are we thinking about it in terms of equity or, or debt opportunities? Thank you. Hi, Yaron here again. It's our decision what kind of funding to make, and I think we are in a situation that we can elaborate and choose whatever we think it's the best for our existing shareholders. So, when to raise that funding and what kind of source, we will explore, we will look on it probably in the next few months, and then we'll make a decision based on the terms of the market. The intention for us is to do it not too delayed to the second half of next year, 'cause as we said, in order for us to ramp up by the end of next year, we need to have everything in place. And also, all the BOMs need to be ordered as well. And therefore, the aim is to do it, the latest by half of this year. Got it. Thank you very much. Congrats again. I'll pass it on. Thank you. Thank you. Thank you. I would now like to turn the conference back to Daniel Barel for closing remarks. Thank you, operator. So first of all, thank you, everybody, for taking the time, and thank you for the great questions. I'd like to thank—I think—start by thanking our retail shareholders for the questions they submitted over the technology platform over the past week. And I believe we addressed most of them during this Q&A session. Thank you guys for the continued support. I wanna end today's call with a final word of thanks. Really heartfelt thanks to our teams around the world who continue to deliver even in the most challenging situation. I'm very proud of you guys, all Team REE, for doing that, and excited to bring, you know, the hard work and dedication to fruition in the coming days. Looking forward to sharing updates with everybody soon, and thank you again for joining. Goodbye. This concludes today's conference call. Thank you for participating. You may now disconnect.