Ree Automotive enters manufacturing agreement with Motherson Group

REE Automotive and Motherson Group announced a strategic agreement. Pursuant to the agreement, Motherson will manage sourcing and supply chain of all production parts and support the assembly of the REEcorner and REE P7 electric trucks, the first full by-wire, software-driven certified medium duty electric truck available on the market today. Motherson will also nominate a director to join REE’s board of directors. In addition, REE has entered into definitive agreements with certain investors, including M&G Investments, Motherson, and Varana Capital, for the purchase and sale of 11,001,941 shares of its Class A ordinary shares at a purchase price of $4.122 per share in a registered direct offering, for gross proceeds of $45.35 million before deducting applicable fees and expenses. REE intends to use the proceeds for general working capital. The offering is expected to close on or by September 19, 2024, subject to the satisfaction of customary closing conditions. M&G Investments, REE’s long-term supportive shareholder, led the investment with $20 million followed by Motherson participating with a $15 million investment. Following the closing of the offering, M&G will hold approximately 16.00% of REE’s issued and outstanding Ordinary Shares; Motherson will hold approximately 19% on a non-diluted basis; and, similarly, Varana Capital 8.00% Benefiting from the new collaboration, the buying power, manufacturing capability, and industry relationships of Motherson, REE aims to expedite production to meet growing demand and anticipated fleet orders from significant multi-national customers. REE offers the only software-driven medium duty electric truck that can meet an expected fleet transition to electric of more than 240,000 medium duty trucks in the U.S. alone and more than double across the rest of the world. By collaborating with Motherson, REE can focus on further growing its customer base, pulling forward orders, increasing gross and cash flow margins, and expanding its patent portfolio.