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REE Automotive Ltd. has announced the implementation of significant cost reduction measures aimed at streamlining its operations and extending its financial runway. The automotive technology company is adjusting its business strategy to navigate challenging global economic conditions and ensure long-term stability.
Key Highlights:
- The company is targeting a 55% decrease in monthly operating costs, from approximately $6 million to $2.7 million by the end of the year.
- The restructuring includes an approximately 50% reduction-in-force across its U.S., U.K., and Israel locations.
- These measures are intended to extend REE’s financial runway beyond 12 months.
- REE will shift its focus to licensing its Software-Defined Vehicle (SDV) technology through partnership models.
Strategic Shift to Ensure Stability
In response to volatile macroeconomic conditions, REE Automotive is taking decisive action to create a more sustainable business model. The core of this strategy involves a significant reduction in operating expenses. This is being achieved through a comprehensive plan that includes a workforce reduction, which will incur a one-time charge of approximately $2.1 million.
Daniel Barel, CEO and co-founder of REE Automotive, stated that while difficult, these steps are necessary for the company’s long-term health. The goal is to become a leaner operation focused on its core technological strengths.
Focus on Core Technology and Future Growth
The new organizational structure allows REE to concentrate its resources on the innovation and development of its proprietary SDV technology. The company will maintain its essential research and development and engineering capabilities to continue advancing its products.
REE’s primary focus will now be on driving forward its licensing and partnership models. This approach allows other original equipment manufacturers (OEMs) and technology companies to build vehicles using REE’s advanced platform. The company’s “complete not compete” philosophy enables partners to design vehicles to their specific needs, powered by REE’s technology.
REE Automotive is a pioneer in by-wire vehicle control, having been the first to achieve FMVSS certification for a full by-wire vehicle in the U.S. Its technology for steering, braking, and driving eliminates the need for mechanical connections, creating more modular and adaptable vehicles. While pausing production, the company will maintain its core production abilities for when market conditions are more favorable. Barel expressed confidence in the opportunities ahead and the company’s ability to generate shareholder value by accelerating its software products.
To learn more, visit www.ree.auto.
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