REE Automotive Ltd. (NASDAQ: REE) is witnessing a correction in its stock price on the US stock charts this morning. As of the latest pre-market check, REE shares were down 2.07%, trading at $4.25. This adjustment follows a significant spike of 44.19% in the previous session, when the stock closed at $4.34, spurred by a noteworthy manufacturing agreement announcement.
REE inked Strategic Partnership with Motherson Group
REE Automotive has entered into a strategic partnership with Motherson Group, a leading engineering and manufacturing specialist with extensive experience and longstanding relationships with global original equipment manufacturers (OEMs).
Under the terms of the agreement, Motherson will oversee the sourcing and supply chain management for all production components, as well as support the assembly of REEcorner and REE P7 electric trucks.
These trucks are distinguished as the first fully by-wire, software-driven certified medium-duty electric trucks available on the market. As part of this strategic alliance, Motherson will also appoint a director to REE’s board, further solidifying the collaborative effort.
Capital Raising and Future Plans
In addition, REE has finalized agreements with various investors, including M&G Investments, Motherson, and Varana Capital, for the sale of 11,001,941 shares of its Class A ordinary shares.
The shares were offered at $4.122 each in a registered direct offering, generating gross proceeds of $45.35 million before fees and expenses. The funds are intended for general working capital and the offering is expected to conclude by September 19, 2024, pending customary closing conditions.
REE’s Enhanced Production and Market Strategy
With the new collaboration, REE aims to leverage Motherson’s substantial buying power, manufacturing capabilities, and industry connections to accelerate production. This move is designed to address the growing demand and expected fleet orders from major multinational clients.
REE’s software-driven medium-duty electric trucks are poised to meet an anticipated transition to electric vehicles, with over 240,000 medium-duty trucks projected for the U.S. market alone, and an even larger number globally.
This partnership will help REE navigate production challenges, enhance its customer base, increase order volume, and expand its patent portfolio. The synergy between Motherson’s global manufacturing expertise and REE’s innovative technology is set to advance the electrification and carbon neutrality goals, benefiting both customers and investors alike.
