Electric vehicle maker REE is getting closer to serial production of its commercial models, but in the meantime continues to lose money.
The company from Herzliya reported today a loss of 25.2 million dollars in the second quarter, a deepening of 17% compared to the loss in the first quarter. The coffers of the company, which merged last year with American Spak and began trading on Nasdaq, have $206.8 million left.
The company submitted a shelf prospectus to raise an additional 200 million dollars in a secondary share issue, but reports that the amount it has will be enough to bring it to the start of serial production.
Last month, REE unveiled two electric commercial models based on its large electric platform, the P7: the larger Proxima developed for the American market, and the smaller P7B, also intended for the European market. At the end of the year, its first production line should start operating in Coventry in the UK, and it is building another one in Texas in the USA.
Last month, the company held demonstration events for potential customers, transport and shipping companies, who need a vehicle that will transport goods from logistics centers to the final customers, using a vehicle with no exhaust emissions. In the coming months, REE will provide first commercials to potential customers for a longer experience, before making a decision on the equipment.
Since the disclosure of the two commercials, REE stock has recovered, having lost most of the value it had when trading began. In the last month, the stock registered an increase of 21%, and the company is now trading at $1.5 per share, after it was already at $1.13 (not far from the threshold at which companies are delisted from trading on the Nasdaq). Accordingly, its market value grew to $482.8 million. Also After the recent rise, the stock is still down 73% since the beginning of the year.
The increase in REE’s share price was also led to an announcement by the American competitor Kano, about an order from the Walmart chain for 4,500 electric vans, to be delivered in 2023. Both companies are in a race against the clock to start supplying and selling their vehicles as the cash they raised runs out. REE has not yet announced any orders it has received. Kano has lost 51% of its value since the beginning of the year and is trading at a value of 948 million dollars.
On the other hand, the British Arrival, another competitor, announced a restructuring and layoffs in order to survive until the start of serial production of its commercial vehicle, also in 2023. The company has lost 82% of its value since the beginning of the year and trades at a value of 868 million dollars.
The American Rivian, which in addition to commercial vehicles also produces electric vans and SUVs, recently announced layoffs, but it already produces the vans and commercial vehicles, which received a huge order of 100,000 tools from Amazon. Amazon has $16 billion worth of cash at its disposal, and it is currently preparing to open a second factory in the US in 2025. Its stock has also been cut since the beginning of the year, by 64%, and it trades at a much higher market value than its competitors, at $33.6 billion.