REE Automotive .(US:REE)2022-08-16 17:58Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $25.2 million in Q2 2022, compared to a net loss of $21.5 million in Q1 2022, primarily due to lower income from warrants remeasurement [34] - The non-GAAP net loss decreased to $21.3 million in Q2 2022 from $28.3 million in Q1 2022, attributed to the timing of expense recognition related to development and production capacity costs [35] - As of June 30, the company had approximately $207 million in liquidity, consisting of cash and short-term investments, with no debt [37] Business Line Data and Key Metrics Changes - The company is focused on the commercialization of two separate P7 products, with strong customer interest in electric vehicles powered by REE, expecting firm orders in the coming months [10][19] - The P7 platform is designed to accommodate commercial vehicles from Class 3 to 5, with two full vehicles already debuted [14][21] - The company is on track to achieve an initial production capacity of 10,000 vehicle sets by the end of 2022, with plans to double this capacity to 20,000 vehicle sets annually [13][28] Market Data and Key Metrics Changes - The company is actively assessing the potential benefits of regulatory tailwinds, such as the Inflation Reduction Act, which supports the shift of major commercial fleets to electric vehicles [12] - The company targets the Class 3 and Class 5 commercial vehicle segments, with approximately 750,000 trucks in these classes needing electrification in North America and Europe [64][66] Company Strategy and Development Direction - The company aims to convert its pipeline into backlog by receiving customer input on the P7 product line and deploying test fleets for real-world evaluations [9][19] - The integration centers will utilize robotic assembly cells for greater flexibility and scalability, allowing for rapid deployment of technology across various applications [30][33] - The company emphasizes a CapEx-light business model, requiring significantly less capital than traditional OEMs for establishing integration centers [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting production capacity targets despite potential supply chain disruptions, reaffirming the timeline for achieving 10,000 vehicle sets by the end of the year [56] - The company remains focused on executing its business plan, with the majority of its budget allocated towards the commercialization of the P7 platform in the U.S. and Europe [39] - Management highlighted the importance of customer feedback in the development process, indicating that the Proxima vehicle received strong acceptance from fleet operators [48] Other Important Information - The company filed a shelf registration statement intending to allocate up to $75 million for the sale of Class A ordinary shares, although there are no current plans to issue shares under this program [38] - The company is committed to providing a full turnkey solution for some customers, including charging infrastructure and maintenance services, while also allowing others to manage these aspects in-house [88] Q&A Session Summary Question: What is the go-to-market strategy for the P7-B? - The company will utilize both direct sales and partnerships with upfitters like EAVX and Morgan Olson, depending on the vehicle class and market structure [43][44] Question: What is the margin profile difference between P7-B and Proxima? - The margin profile and economics are expected to be similar across both vehicles [45] Question: What feedback was received from the Proxima event? - Feedback was largely positive, with customers indicating that the vehicle met their needs, although there were suggestions for improvements [46][48] Question: Can you provide details on the shelf registration filed? - The shelf registration is considered good housekeeping, with no intention to use the ATM facility currently, as the company is fully funded for P7 [55] Question: Are there risks to achieving the 10,000 platforms per year capacity? - Management does not foresee any hiccups in reaching the production target by the end of the year [56] Question: How do the two strategies of supplying chassis and integrated vehicles evolve? - The company targets the two largest segments in commercial vehicles, with a clear path to market through customer demos and test fleets [60][63] Question: How many test units for Class 3 and 5 will be produced in the second half of the year? - The company has the capacity to manufacture over 100 test units, but the actual number will depend on customer acceptance [72][73] Question: What is the expected cadence of OpEx and CapEx for the second half of the year? - The company remains disciplined in spending and is on track to meet its guidance, with a step-up in spending expected as testing activities ramp up [80]