REE Automotive Ltd.

Greetings and welcome to the RE Automotive third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Lamar Gruber, Vice President of Investor Relations. Thank you. You may begin.

Thank you, operator, and thank you all for joining our third quarter 2021 conference call. We hope you have seen our press release issued earlier this morning at investors.we.oto. 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 differ from those anticipated by such forward-looking statements for a variety of reasons, many of which are beyond our control. Please see our recent filings with the Securities and Exchange Commission, which identify the principal risks and uncertainties that could affect our business, prospects, and future results. We assume no obligation to update publicly any forward-looking statements. In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, non-GAAP net loss, and EPS. Please see our release and filings for reconciliation of these non-GAAP measures to their most directly comparable GAAP measures. Joining me today is our co-founder and CEO, Daniel Barrel, who will provide an overview of our business and given operations update, as well as our CFO, Hai Aviv, who will continue with the discussion of our financial results and outlook before we open up the call for your questions. At this point, I will turn the call over to Daniel. Daniel, please.

Thank you, Limor. Good morning and welcome to our third quarter 2021 earning call. I will begin the call with an update on the company's progress on our many strategic initiatives and milestones we've achieved in the last few months. Then our CFO, Haim, will follow with a recap of the financial of the third quarter and our outlook. After that, we will be happy to take your questions. We have made great progress in our efforts to reach commercialization over the last quarter to date. To this point, we have made many accomplishments to share, including securing customer validation for our first prototype, building out our supply chain, assembling our infrastructure, strengthening the team, and unveiling a very significant product milestone of a fully autonomous last mile delivery concept vehicle. All of these accomplishments are coming ahead of our schedule, and we continue to make strong progress. In our first quarter as a public company, we outlined several of our targets to advance production readiness as we move towards commercial production in late 2023. Referring to that, I'm proud that our team has already achieved multiple milestones, thanks to the additional investment in our engineering and commercial capabilities. First, I'm excited that we reached significant customer validation milestones with Navia. As we successfully completed the re-platform validation, this is part of an ongoing validation process with Navia, a French-based company that is leading autonomous vehicle systems development. This is the first of a few prototypes we presented recently to customers by evaluation, which we will be happy to share with you in the future. This is an example of a typical process we will go through with each of our customers that will result in us reaching commercialization in the coming years. This also demonstrates how we will advance our strategic alliance ahead of schedule, getting us closer to production and revenues. A second and important step towards commercialization is securing supply chain. As part of our initial integration focus on a U.S.-based delivery van program in strategic collaboration with JB Poindexter, we have extended supply chain capacity to support our growth. To this point, we started nominating key suppliers. This includes American Axle for high-performance electric drive units and Brembo, for a breaking system. These nominations not only support our progress, but also provide validation for the supply side. These are critically important steps as we are not just buying components or implementing third-party technology. We are jointly developing key capabilities together. In addition, those suppliers commit to volume, allowing us to progress towards commercialization even during these challenging supply chain times these partnerships are critical steps in the ongoing effort to build out our secured global veteran vendors network our vvm yesterday we introduced leopard our first fully autonomous last mile delivery vehicle concept leopards design and specifications are the results of collaborations with multiple global delivery and technology companies to demonstrate one potential design application enabled by a groundbreaking modular technology. Leopard is an industry vision for efficient and reliable delivery solutions aimed to meet the increased demand coming from e-commerce. The powered by real Leopard utilizes the highest volumetric efficiency and range to optimize multiple business cases. We look forward to showing this concept vehicle in January at CES in Las Vegas, where attendees will be able to see this and other examples of re-technology up close and in action. From a facility infrastructure perspective, during the quarter, we continue to expand our UK Engineering Center to launch integration centers. a smart robotic factory that will serve as a blueprint for all future integration centers and meet expected European customer demand. We were also awarded $17 million in funding from the UK government to support our expansion efforts. We are now finalizing our site selection for our first integration center and our headquarters in Austin, Texas, and remain on track to break ground as the details are finalized. We have an extremely appealing value proposition for the growing commercial vehicle market, given that RIS differentiated modular EV platforms reduce time to market for EV manufacturers. We believe this is yet another driver that supports our ability to grow significantly in the coming years. However, one constant that has not changed in the auto industry is the basic manufacturing process of vehicles, whether they are powered by internal combustion engine or electric motors. Other than the swap out of ice for an electric motor, most vehicle systems have changed little, with the mechanical control components and drive, steer, and brake functions remaining between the wheels and constraining modularity and functionality. We believe that new mobility requires a new approach to design, manufacturing, and serviceability, which is why REE is fundamentally changing the approach to EV design and manufacturing. Specifically, our value proposition includes one REE Corner patented technology that integrates critical vehicle components such as steering, braking, suspension, powertrain, and control into a single, Compact module. Our fully flat EV platforms are geared to serve as the underpinning on top of which EV and AVs will be built. They are designed to provide greater interior space and volumetric efficiency as compared to vehicles on legacy architectures. RIS modular EV platforms with single wheel X by wire are capable of carrying more passengers, more cargo, and being in service longer translating into major cost saving lower cost of ownership and we believe ultimately higher revenue to our customers because of this approach we believe that our technology is essentially future-proof it can be used for building vehicles to serve virtually any applications evs and avs that are powered by rain are agnostic to vehicle size shape power source, and driving mode. They can operate using either batteries or fuel cells and be either human-driven or autonomous, all while affording complete design for them, basically commonality across corners. The ReCorner and ReBoard are designed to be manufactured via multiple production lines across the world that feed our global network of integration centers in partnerships with the world's leading T1s. The result is faster time to market, significantly lower capital investment, and the security of supply chain capacity that provides quality control. I've said it many times, like Intel Inside powers everything from laptops to data centers, future vehicles powered by REE are intended to power EVs in all shapes, sizes, weight, and dimensions. Given our unique technology and manufacturing approach, whatever EV technology wins, RE wins. We are laser focused on growing our effective market share while expanding various vehicle types that are powered by RE. In that pursuit, we have signed multiple strategic collaborations with major OEMs and leaders across the automotive and mobility sectors. Our business plan calls for us to complete, not compete with OEMs by providing the crucial EV platforms on top of which they can build any type of EV. Moreover, with the traditional approach to vehicle manufacturing, introducing a new platform to the market requires five to eight years and one to two billion dollars of investment. With these platforms, we believe that time to market can be reduced to 18 to 24 months and a fraction of the cost. We are excited that major corporations such as Hino, Toyota's truck arm, Magna, JB Poindexter, a global logistic company, and Navia, which are all facing the challenges of offering or using best-in-class electric vehicles as soon as possible, are choosing our platforms and technologies and we are actively working to build their future vehicles with future vehicles powered by Ring. Through our strategic alliances with major industry players, we gain access to their extensive customer base and sales of hundreds of thousands of vehicles, which today are traditional ICE vehicles, but in the future will be best-in-class electric vehicles powered by Ring. As we continue to set Ring apart, from others in the industry. We have already started to reach many positive milestones and targets consistently as we continue to advance for commercial production in 2023. Additionally, in a world of rising challenges and costs, we believe that the fact that we can provide a solution for so many in the industry is starting to be realized.