REE Automotive Partners with Motherson Group

Partnership to advance electric truck production. REE raised $45.35 million in a direct offering led by M&G Investments to support this effort.

Israel / India- REE Automotive Ltd., and Motherson Group., have entered a strategic agreement. Motherson will oversee sourcing and supply chain management for REE’s REEcorner and REE P7 electric trucks, the first full by-wire, software-driven medium-duty electric trucks on the market. Additionally, Motherson will appoint a director to REE’s board.

REE has secured agreements with investors including M&G Investments, Motherson, and Varana Capital for a direct offering of 11,001,941 Class A shares (or pre-funded warrants) at $4.122 per share, totaling $45.35 million in gross proceeds. The funds will be used for general working capital. The offering is set to close on or by September 19, 2024, pending customary closing conditions.

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 (or pre-funded warrants in lieu thereof) 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 led the $45.35 million investment in REE, contributing $20 million, with Motherson adding $15 million. After the offering, M&G will hold about 16% of REE’s shares, Motherson will have 19%, and Varana Capital will own 8%. This collaboration will leverage Motherson’s buying power and manufacturing capabilities to accelerate REE's production and meet increasing demand, including an expected fleet transition of over 240,000 medium-duty electric trucks in the U.S. REE aims to expand its customer base, boost margins, and enhance its patent portfolio through this partnership.

Mr. Laksh Vaaman Sehgal, Vice Chairman, Motherson Group said, “We are pleased to announce our long-term agreement with REE to accelerate its industrialization within a mutually beneficial commercial framework. We have been truly impressed by REE’s remarkable technology, exceptional product offerings, and robust team. We look forward to facilitating REE’s growth and technological advancement by expertly managing its supply chain and utilizing our world-class engineering and manufacturing capabilities to drive commercialization and industrialization. We also want to strengthen REE’s integration into the automotive ecosystem by delivering unparalleled customer support across the value chain. We believe that this strategic partnership will contribute towards Motherson’s diversification and increasing content per vehicle strategy.”

Mr. Daniel Barel, REE Co-founder and CEO, said, “We are very excited to enter into this agreement with Motherson, as I believe this agreement will enable us to leapfrog over many of the challenges others face when ramping up production. Motherson’s global footprint and manufacturing prowess combines perfectly with REE’s technology and innovation mindset. This combination will benefit our customers and investors alike, by pushing forward the transition towards electrification and carbon neutrality. We are proud to join forces with Motherson and looking forward to learning from their incredible story and amazing culture.”

Mr. Carl Vine, M&G Investments’ Portfolio Manager, said, “I believe that this is a transformational transaction for REE and we are delighted to be involved. As shareholders in both companies, we are confident that the combination of core competencies from both sides will result in a sigh of relief from global fleet owners, who have been starved of an electrified product line-up that can be produced and serviced at scale. This is a win-win all round.”