REE Automotive Ltd. (NASDAQ:REE) Q3 2023 Earnings Call Transcript
REE Automotive Ltd. (NASDAQ:REE) Q3 2023 Earnings Call Transcript November 30, 2023
Operator: 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 speakers’ presentation there will be a question-and-answer session. [Operator Instructions] 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.
Kamal Hamid: Thank you, operator, and thank you all for joining our third quarter 2023 conference call. I hope that you have 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 will 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 28, 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.
Daniel Barel: 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 expansion 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 3 months. As evidenced by our achievements this quarter, we continue to receive strong positive market feedback on our unique P7 vehicle, with the 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 fleet. As we grow our order book, we continue to strengthen our balance sheet with additional selective financing. These efforts are part of our risk-adverse plan to secure in advance the working capital funding required to produce the expected binding orders of our growing order book. I'm 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 pages ago.
Operationally, we continue to demonstrate strong financial discipline by remaining on track while decreasing our year-on-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 4 to 6 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 3 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. So we have invited our retail investors to share their questions for this quarter. Today, in addition to analyst questions, 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.
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