What is driving this change?
Why did Amazon end up with Rivian [for electric vans]? Because they wanted something different from what the automakers offer. Amazon said, “Rivian, come here a minute. Here is $12 billion. Can we get a van?” Rivian started as a sports car company. They had no intention of doing commercial vehicles. But when [Amazon founder Jeff] Bezos asks for something nicely, it's probably wise to say, yes.
Why just do the REEcorner and not a complete van?
There is a Hebrew saying that goes like this: You cannot teach a father how to make children because it's self-explanatory. Therefore, it does not make sense for us to build a chassis for the likes of Toyota. They are far better at it than we are. We will manufacture the corners.
Automakers do not need you to build a chassis. But delivery companies will, right?
Yes, when you work with the likes of [Poindexter-owned panel van converter] Morgan Olsen they need the full chassis to put the body on top. They can't do anything with the corners. So, we are also building the capability to do a full rolling chassis. For customers that are interested in full vehicles, we partner with Magna and others to give them a full vehicle where we stop at the platform level. Morgan Olsen and Poindexter build two out of three vans so I am sending them full platforms.
Who does the electric/electronic integration?
It depends. If it's a delivery company, we will develop a full product. So, we will partner with Morgan Olsen to do that. But if it's an automaker, the automaker will do that. You can't teach an old dog new tricks.
Who integrates the telematics and thee systems that will help the vehicle drive autonomously?
That comes on top. We are agnostic. We are the limbs; the autonomy is the eyes. Remember, we complete, we do not compete. We don't want to compete against the autonomy player. We want to work with them. We are providing the most flexible platform so that we can work with anyone.
How did the REEcorner come about?
I come from game theory, not engineering. My partner comes from engineering. When I tried to build a dominant strategy and calculate the probability of it, I always ended up hitting a wall. The pace kept killing the process. If it takes you eight to 10 years to develop a program and an investment of $1 to 2 billion, but you don't control the brand and the customer then changes plan you are going to overshoot the market. You start a 10-year journey where you know where you want to go today, but it's a moving target. So, there is almost zero chance you will hit it. You get to a point where you know you're missing the target, but you are at the point of no return. You have to take off, like an airplane.
What was your solution?
My solution was not to bet, but to build something so modular that you can take any shape, any form, any kind and evolve.
What's to stop others from building a corner?
It might take them eight years, during that time we will have already launched six new programs, making their generation so obsolete and old that it doesn't make any sense. We have left no more air in the room.
How much space does a corner save?
One specific program has 36 percent more volumetric efficiency [cargo space].
REE went public on the Nasdaq composite in the U.S. via a SPAC deal. Other EV-focused startups are being targeted by short sellers who aren’t convinced by the hype. How do you avoid the attention of people betting you are going to fail?
You execute.
How do you show you are executing before the product is out?
Without bells and whistles. What you want to do is underpromise and overdeliver.
Do you worry about the volatility of your shares?
There was some turbulence in the market now where [the valuation of] the entire [EV-focused] industry went down 50 to 60 percent in the a few months. We can either cry over this or we can do something about it. The only thing you can do is execute. We are not here for the short term.
Automakers aren’t big on shouting about where their parts come from. Are you concerned REE will become another nameless contributor?
Is Intel nameless in computers?
Good answer. Does that mean you expect your partners to talk about REE by name?
Hino in 2019 produced one vehicle for the world to see powered by REE. Magna and Poindexter speak about us. Why? Because it means that this is serious. You want to say “Powered by REE” because it means you are running on the most advanced, most capable, most modular platform in the world.
Do you need more funding?
We were lucky enough to secure all the funding we need.
What does your new UK development operation do?
Our R&D center in Israel is where we come up with the ideas. Our UK development center is where we test vehicles and where we engineer all the hardware, software and mechanics to automotive-grade standards. This location is actually now bigger than our Israel center. We also have a launch factory in the UK.
What will the launch factory do?
It’s a scaled-down integration center. Our methodology is to have multiple integration centers, like Lego building blocks. Each one has the capacity to supply 30,000 vehicles a year. The idea is that we manufacture the subcomponentry globally, but we assemble that into a full corner or a full platform at the point of sale. We have a scaled-down integration center in the UK where we stabilize the assembly process to make sure it works perfectly.
What capacity does it have and when does it start?
It will start in spring 2022. We haven’t announced capacity yet. It won’t necessarily manufacture at peak efficiency, but the corners will be commercial quality.
What capacity does your Texas plant have?
Between 30,000 and 40,000 platforms a year.
