{"url_path":"/sec/ree/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 Information on the Company","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1843588/0001628280-26-035308-index.html","accession_number":"0001628280-26-035308","cik":"0001843588","ticker":"REE","issuer_name":"REE Automotive Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1843588/0001628280-26-035308-index.html","primary_entity_key":"0001843588","primary_entity_name":"REE Automotive Ltd."},"word_count":15158,"has_tables":true,"body_markdown":"Item 4. Information on the Company\n\nA. History and development of the company\n\nREE Automotive Ltd. was incorporated on January 16, 2011, as a company limited by shares under the laws of the State of Israel. We are registered under the Israeli Companies Law and registered with the Israeli Registrar of Companies under registration number 51-455733-9. REE’s principal executive offices are located at Kibbutz Glil-Yam 4690500, Israel, and our telephone number is +972 (77) 899-5200. Our registered agent for service of process is Puglisi & Associates located at 850 Library Avenue, Newark, Delaware 19711, and its telephone number is +1 (302) 738-6680.\n\nInvestors and others should note that we may announce business and financial information to our investors using our website www.ree.auto, our SEC Filings, webcasts, press releases, and public conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.\n\nInformation contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein. We have included our website in this Annual Report solely for informational purposes. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.\n\nCapital Expenditures\n\nFor a description of our capital expenditures, see “Item 5.B. Operating and Financial Review and Prospects-Liquidity and Capital Resources.”\n\nB. Business Overview\n\nCompany Overview\n\nWe are an automotive technology company that develops and produces cutting edge SDV technology designed to manage\n\nvehicle operations and features through proprietary-developed software, enabling what we believe to be safer, more modular, and better performing vehicles. Our advanced zonal SDV architecture is designed to integrate seamlessly with legacy systems to improve vehicle safety, performance, and reliability. By centralizing key vehicle functions, the architecture seeks to enhance modularity, redundancy, and stability, and to enable what we believe to be safer and more efficient vehicle platforms. Powered by secured AI and deep over-the-air upgradability, REE’s technology allows for continuous updates and improvements throughout a vehicle’s lifespan. This makes Powered by REE® vehicles adaptable to customer and market changes and designed with future autonomy and connectivity in mind.\n\nReliant upon our patent-protected SDV technology, our full by-wire P7 electric commercial truck is certified under U.S. Federal Motor Vehicle Safety Standards, or FMVSS. Powered by REE® vehicles demonstrate our commitment to offer what we believe to be intelligent, flexible, and scalable mobility solutions while shortening and streamlining the processes, costs and time to market for such vehicles for our customers.\n\nOur approach of “complete not compete” allows original equipment manufacturers, or OEMs, and other customer types to license our technology in order to design and build vehicles tailored to their specific requirements using REE’s scalable, future-ready platform. Our technology and collaborative application programming interface, or API, approach allows our customers to connect their current and future operating systems and application layers having significant input on the design of the system according to their individual needs. In addition, our software flexibility allows delivery and logistics fleets, dealers, Mobility-as-a-Service, or MaaS, providers and others to incorporate their Voice of the Customer, or VoC, input into new vehicle designs and applications. Incorporation of this voice allows these customers to design vehicles that are better tailored to the specific needs of their end-user base and the market in which they service. Additionally, in February 2025, we launched REEai Cloud to provide advanced data analytics based on artificial intelligence capabilities, among others.\n\nOur SDV technology is a combination of software, electrical hardware, and by-wire technology.\n\n58\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nSoftware: Our patent-protected proprietary software controls different automotive functions including vehicle dynamics, safety, power loops, efficiency, advanced driver-assistance systems, or ADAS, infotainment and over-the-air, or OTA, services. Our software and analytics support optimized performance and provide advanced data analytics via our REEai Cloud. With embedded software redundancies on both the communication layer and the application layer, we are able to support high levels of ADAS and autonomy features including Level 4, or L4, autonomous driving.\n\nElectrical Hardware: We have developed a fast system on chip, or SoC, built in collaboration with Infineon and Vitesco to run our propriety software in a secure, stable, and efficient manner. Our current Gen4 SoC is designed in a full zonal architecture, allowing for a significant reduction in the number of vehicle electronic control units, or ECUs, and controllers. Our SoC is designed in an effort to be future-proof with OTA update capabilities, embedded hardware redundancies, and ample computing power.\n\nX-By-Wire: Our X-By-Wire vehicles rely upon our proprietary REEcorner™ design, which packs critical vehicle components including steering, braking, suspension, powertrain, and control into a single compact module that is located between the chassis and the wheels. Each module is independently controlled, eliminating traditional mechanical linkages. Once each of our REEcorners are positioned across the four corners of our chassis, they can independently improve driving precision on the road, which we believe produces a safer vehicle overall. Key benefits to our X-By-Wire include what we believe will be a lower overall total cost of ownership, or TCO, and operational efficiency. Our X-By-Wire technology is power agnostic, allowing us to utilize different power sources and configurations including different battery types, hybrid vehicles, and fuel cells. Our REEcorner design is able to incorporate multiple drive, brake, suspension, and other components including several existing off-the-shelf components, maximizing compatibility with OEMs.\n\nWe believe that by incorporating our proprietary software through our certified hardware architecture, our potential customers and customers can design and bring to market new vehicles faster and at a lower cost, which may improve their competitiveness in their respective markets. By “completing and not competing”, we can partner with customers, including OEMs, in the automotive industry where electric and autonomous vehicles will be “Powered by REE”, allowing for what we aim to be a faster and larger adoption of our X-by-Wire technology and electrification at scale.\n\nUntil our production pause, we focused our efforts on producing our P7 vehicle lineup for the North American medium-duty truck segment due to what we believe to be its total addressable market size, importance of TCO improvements for commercial fleets, and strong business case for fleet operators and logistic companies to electrify their fleets. We had targeted delivery and logistic fleets, dealers, new mobility players, MaaS providers, and autonomous driving companies. Our goal had been to allow these companies to build entire fleets based on our SDV Powered by REE platforms. We had aimed to offer many customer benefits including a reduced TCO, lower maintenance and spare-part inventory management costs, higher active and passive safety standards, improved vehicle efficiency, ADAS, and increased fleet management system compatibility.\n\nIn furtherance of such goals, we had also partnered with various dealerships in North America in an effort to build one of the largest commercial EV dealership networks. As of May 15, 2025, our dealer network had spanned across approximately 80 locations in both the U.S. and Canada, each an Authorized Dealer. Each of our Authorized Dealers had placed initial orders for our P7 products, with certain Authorized Dealers having also placed follow-on capacity reservations. We have also entered into a non-binding memorandum of understanding with a leading technology company to produce autonomous shuttles. Our reservations include both binding sales orders and non-binding capacity reservations, including those from our March MOU (defined below). Reservations are intended to include deliveries over the next few years.\n\nFurthermore, as a technology company, we had sought to partner with other leaders for the production and assembly of our\n\nP7 vehicle lineup. In 2024, we entered into a strategic partnership with Motherson Group, one of the largest automotive\n\ncomponent manufacturers with operations in more than 400 facilities across 44 countries globally. Through this partnership\n\nwe expected Motherson to manage our global supply chain and drive operational and manufacturing improvements,\n\nimpacting our production line, supply chain management, bill of materials, and cost structure. In addition, we\n\ncontracted with Roush Industries Inc., a leading global product development supplier operating across more than 30\n\ncountries, to assemble our P7 lineup in its U.S. facilities in Michigan. Prior to our production pause, we had begun the\n\nnecessary preparations at Roush’s Michigan facility for deliveries to the North American market such as tooling with respect to the assembly of Powered by REE® vehicles. In tandem, prior to our production pause, we had commenced the\n\nproduction of our initial vehicles for delivery.\n\nPrior to our production pause, we had made progress on the following main business fronts:\n\n•Growing our vehicle reservations value\n\n•Kicking off production of our P7 program\n\n•Securing a global supply chain for the P7 lineup\n\n•Increasing our North American footprint through our Authorized Dealer network, or ADN, to approximately 80 locations\n\n•Advancing discussions with OEMs and technology companies for integration of our SDV technology into their vehicle platforms\n\n59\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\n•Initiating autonomous driving, or AD, programs with Airbus\n\n•Launching REEai Cloud product in February 2025; and\n\n•Securing a strategic partnership and investment from Motherson and launching U.S. assembly and integration of our P7 products with Roush, both of which help us achieve improved operating economics while accelerating our ability to scale and meet demand.\n\nRecent Business Developments & Initiatives\n\nAdvancing negotiations with OEMs, Tier 1s and mobility players for integration of our SDV and x-by-wire technology into vehicle platforms\n\nWe are in active discussions with several global vehicle manufacturers who are interested in integrating our SDV and x-by-wire technology into their vehicles in order to leverage our technology and shorten their time to introduce their vehicles to the market. We are seeing that OEMs are looking to expedite their transition to SDV architectures, and therefore collaborating with technology pioneers like us can allow automakers, in our view, to protect and regain market share by offering customers more technologically advanced vehicles with better TCO and performance as well as decreasing their research and development costs. Our philosophy of “complete not compete” allows global OEMs, major automotive companies, and other customer types to access our SDV technology, which they can integrate into current and future product lines across multiple vehicle categories. We are seeing interest from OEMs that are evaluating our SDV technology, which may include interest with respect to our x-by-wire technology, REEcorner®, and/or our Software-as-a-Service, or SaaS, offerings.\n\nStrategic Alternative Process\n\nOn May 1, 2026, the Company announced that it had initiated a review of strategic alternatives to maximize shareholder value. These strategic alternatives may include a potential sale of the Company or all or a portion of its assets, a merger or other strategic business combination, a reverse merger, strategic partnership(s), licensing opportunities, or other strategic transactions. The Company expects the strategic review process to proceed on an expedited basis. The Company’s Board of Directors has engaged TD Securities (USA) LLC as its financial advisor to assist it in the strategic review process.\n\nWhile this strategic review is underway, the Company does not intend to disclose or comment on developments related to its review unless and until its Board of Directors has approved a specific transaction, or it has otherwise been determined that further disclosure is appropriate or necessary. There can be no assurance that this strategic review will result in any transaction, nor any assurance as to the outcome or timing thereof.\n\nNovember 2025 Mitsubishi Fuso Memorandum of Understanding\n\nOn November 18, 2025, we announced that we entered into a non-binding memorandum of understanding, or the MOU,\n\nwith Mitsubishi Fuso Truck and Bus Corporation, or Mitsubishi Fuso. The MOU is intended to enable Mitsubishi Fuso to evaluate REE’s SDV technology and x-by-wire technology for the purpose of potentially nominating REE as the sole supplier for a scalable vehicle-motion-platform based on REE x-by-wire and SDV architecture to be applied on Mitsubishi Fuso’s product line beyond 2032. Under the MOU, the parties agreed to collaborate on a proof-of-concept project over a one-year period that focused on the conversion of a Mitsubishi Fuso eCanter electric truck into a software-defined vehicle powered by REE’s SDV technology. REE also sent one of its P7-C demonstration vehicles to Mitsubishi Fuso for evaluation and demonstration purposes. The MOU does not obligate either party to proceed with a commercial relationship or enter into any definitive agreement. As of the date of this Annual Report, REE has completed the third and final phase of the proof-of-concept project and a team from Mitsubishi Fuso arrived to test drive the converted vehicle. We expect to ship the converted vehicle to Mitsubishi Fuso in Japan for a leadership demonstration by the end of May 2026 or during June 2026.\n\nTechnology Company Shuttle Project\n\nOn March 18, 2025, we previously announced the entry into a non-binding memorandum of understanding, or the March\n\nMOU, with a global technology company. On August 15, 2025, we converted our March 2025 memorandum of understanding with a leading technology company into the Definitive Agreement, which became binding and effective upon its execution. However, the commencement of the Definitive Agreement has not yet occurred. Under the Definitive Agreement, REE and the technology company have agreed to collaborate on the design and development of autonomous shuttle prototypes based on our proprietary SDV technology, subject to the commencement of the Definitive Agreement, which date is subject to certain satisfaction of certain conditions precedent, such date being the Commencement Date. Following the Commencement Date and subject to the implementation of the Definitive Agreement, we expect to generate\n\n60\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nup to approximately $107 million over an expected two-year development period, with payments structured on a phased, milestone-based basis, including an initial payment upon the Commencement Date and additional payments tied to development progress. The Definitive Agreement became effective upon execution, but the Commencement Date will occur only upon satisfaction of certain conditions precedent, which have not occurred as of the date of this Annual Report. REE has completed all actions required to trigger the Commencement Date, and the remaining conditions precedent in order to trigger the Commencement Date must be satisfied solely by the counterparty and are outside of REE’s control. The Definitive Agreement also contemplates a potential subsequent production phase relating to Level 4 autonomous public transportation vehicles, incorporating REEcorner modules, which would be subject to the successful completion of the development phase and the negotiation and execution of a separate serial supply and after-market agreement. Prior to the Commencement Date, each party has a contractual right to withdraw from the Definitive Agreement. To-date, neither party has delivered a notice to withdraw from the Definitive Agreement.\n\nBorgWarner Collaboration\n\nOn December 29, 2025, we announced entry into a non-binding memorandum of understanding with BorgWarner, or the\n\nBorgWarner MOU, a Tier 1 automotive supplier, and its motion brand Cascadia. The BorgWarner MOU provides a\n\nframework for cooperation related to the evaluation, development, and potential commercialization of a next-generation\n\nelectric drive unit, or EDU, based on REEcorner technology for global OEM electrification programs. The new EDU\n\nproduct will be jointly developed by BorgWarner, Cascadia Motion, and REE. The BorgWarner MOU provides for a\n\nphased commercial plan, including the potential for royalty-based arrangements and time-limited exclusivity option for the\n\ndistribution of an EDU that integrates BorgWarner’s Cascadia drive unit (motor and inverter) with REEcorner technology, subject to further evaluation, negotiation, and the execution of definitive agreements. In addition to the EDU-focused product offering, the parties plan to evaluate demand for complete SDV solutions, including standalone REEcorner units and REE’s SDV products, which could supplement the EDU offering or provide additional capabilities for OEM customers.\n\nPause of Vehicle Production\n\nDue to what we believed to be unforeseen and unpreventable circumstances surrounding U.S. trade policy with respect to\n\ntariffs and trade wars, on May 15, 2025 we paused our production plans with respect to our P7-S Strip Chassis and P7-C\n\nChassis Cab and Cutway Chassis products until the situation stabilizes. We had stated that once we better understand the\n\nfinal determinations with respect to country-specific tariffs and trade deals, should they materialize, we would expect to\n\naddress our next steps with respect to such production. As of the date of this Annual Report, the production pause is still in\n\nplace. As described under “Cost of Revenues” and “Other Expenses” below, we have taken certain impairments and write-offs in connection with our production pause. For the sake of clarity, as discussed in “Liquidity and Capital Resources,” based on our current financial condition, we do not expect to make a determination regarding any possible resumption of production until we have sufficient capital to support production needs, and there can be no assurance that we will obtain such capital or resume production at all.\n\nIn connection with this pause and our cost reduction initiatives, we reevaluated certain suppliers and other contractual relationships, resulting in the termination of our agreement with Roush Industries, as contract manufacturer, along with other suppliers. In connection therewith, in certain cases we entered into negotiated resolutions of outstanding obligations and, in one case, arbitration proceedings were commenced, which was ultimately settled. Since our production pause, we have focused on less capital-intensive commercialization pathways, including through licensing of our SDV technology and offering our REEcorners to OEMs, suppliers, and other customers. In particular, we have continued discussions with several potential customers about the integration of REE’s zonal SDV architecture and x-by-wire technology into their future vehicle models. We have also been working to collaborate with other Tier 1 suppliers to produce vehicle components based on REEcorner modules to support higher levels of functional safety, including ASIL-D, and to improve efficiency and time to market through over-the-air updates.\n\nVehicle Production Prior to Production Pause\n\nPrior to this production pause, as part of the commercialization of our P7 lineup, in September 2024, we had announced\n\nthat we selected U.S.-based Roush Industries, a leading global product development supplier operating across more than 30 countries, to assemble our P7 vehicles at its U.S. facility. We had also built out a network of carefully curated authorized dealers, which we refer to as our Authorized Dealership Network, focusing on those that have embraced the EV future of commercial vehicles and that are in geographic areas of high demand. In certain cases, our Authorized Dealer Network, were located in states that provided their own tax incentives. Through this dealer network, we had expected to provide sales and service points to the fleet customers across North America.\n\n61\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nBy the end of 2024, we had approximately 80 Authorized Dealership Network locations across the U.S. and Canada, which\n\nas of May 15, 2025, had each placed initial orders for our P7 vehicles. Certain Authorized Dealers also had placed follow-on capacity reservations. Our reservations had included both binding sales orders and non-binding capacity reservations,\n\nincluding those from our March 2025 memorandum of understanding with a leading technology company. Reservations\n\nwere also intended to include deliveries over the next few years.\n\nSuch Authorized Dealership Network had included: Pritchard EV, Tom's Truck Center, Industrial Power & Truck\n\nEquipment, New England Truck Solutions, FMI Truck Sales & Services The Truck Shop, Monarch Truck Center, Ry-Den\n\nTruck Center, Jim Reed’s Truck Sales, Inc., Fleet Direct Sales, Specialty Vehicles & Equipment Ltd., McCandless Truck\n\nCenters, Lynch Truck Centers, Midwest Transit Equipment, LLC, XPO Auto Sales, Inc. and Harris Auto Group (BC).\n\nDuring 2024, we also delivered our P7-C cab chassis demonstration trucks for fleet evaluations in North America through\n\nour Authorized Dealer Network. Our demonstration program was intended to allow potential fleet customers the\n\nopportunity to experience the benefits of our P7-C commercial vehicle in multiple upfitting configuration based on several\n\npartnerships with leading upfitters in North America. As of May 2025, we had conducted more than 400 demonstrations.\n\nIn addition, during 2024, we obtained interest in, and support of, our SDV technology vehicle through additional partnerships. In particular, Penske began demonstrations of our P7-C truck upfitted with a 16-foot Wabash (NYSE: WNC)\n\nDuraPlate® body to Penske Trucks Leasing, which had begun to offer Powered by REE® electric vehicles to its customers\n\nfor demonstration and orders across North America. We also had sent U-Haul our P7-S platform for evaluation as a\n\nsolution to support the electrification of its fleet. During 2024, Knapheide showcased our P7-C with a KUV body, which\n\nwas aimed to provide benefits including low load floor, greater driver maneuverability and comfort and high driver\n\nvisibility. Lastly, Mission Mobile had signed a non-binding agreement with us to build a mobile healthcare fleet using REE\n\ntrucks—highlighting our SDV technology’s versatility across applications.\n\nInitiating Autonomous Driving (AD) Programs with Airbus\n\nIn March 2024, we were selected by, and delivered a prototype vehicle to Airbus UpNext, a wholly-owned innovation subsidiary of Airbus SE, or Airbus, to provide technological know-how based upon the REEcorner® and full-by-wire control systems. Airbus’s autonomous program, reliant upon our technology, resulted in the first-ever autonomous drive on an active runway in a large commercial airport, demonstrating our by-wire leadership and the strength of our autonomous-ready technological capabilities. We believe that the autonomous ready capabilities of our SDV products, along with the Airbus demonstration have generated additional interest from leading AD companies looking for a functional-safe platform as the basis for their future autonomous fleets.\n\nMotherson Strategic Supply Chain Management Services Agreement\n\nOn September 15, 2024, we executed a supply chain management services agreement, or Supply Chain Management Services Agreement, with Motherson, pursuant to which we appointed Motherson (including any of its affiliates) to provide certain services to us on an exclusive basis. In that regard, Motherson agreed to provide services relating to development, management, and optimization of our supply chain, which includes supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration.\n\nWhen we signed this agreement, we anticipated that our ability to service customers at scale will increase. By collaborating with Motherson, we sought to focus on further growing our customer base, pulling forward orders, and increasing gross and cash flow margins.\n\nIf and when we resume production, our ability to do so will depend on our financial condition, access to capital, and the outcome of any strategic or restructuring actions, and we would expect to build to order and have aligned our production plan with what we expect to be our current reservation trajectory. We believe that this strategy would allow us to maximize our capital efficiency.\n\nAs part of this collaboration, we agreed to pay Motherson, on a quarterly basis, an amount equal to fifty percent (50%) of certain cost improvements that would be achieved under the agreement in addition to annual payments for such resources required to be deployed by Motherson for the purpose of rendering the services under the agreement, which shall be agreed upon by us and Motherson.\n\nThe agreement will terminate upon the later of three (3) years or when Motherson has received an amount equal to $30 million in quarterly fees. In addition, the agreement will automatically renew for consecutive one (1) year terms unless either party provides notice of termination within 180 days prior to the end of a term. In addition, Motherson may terminate the agreement for any reason upon providing 180 day written prior notice.\n\nLowering Acquisition Costs\n\n62\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nWith capital efficiency in mind, as we have noted above, we seek to “complete not compete”.\n\nPrior to our production delay we supported and incentivized, and if and when we resume production, we would expect to support and incentivize, our ADN in certain ways that further enhance their economics for selling our vehicles with the goal of lowering acquisition costs. For example, we seek to create brand awareness for our Authorized Dealers through our brand and SDV technology promotional efforts, including through social media campaigns, trade shows, and other demonstrations, while also providing each of our Authorized Dealers with the necessary marketing materials, presentations, discount product options, and sales and product trainings to aid them in their sales efforts. In order to provide customer service, we are leveraging our ADN to provide after-sales parts and service. We believe that this provides Authorized Dealers with parts and service revenues to help drive profitability and allows them to be partners to the fleets in their service areas with respect to our vehicles. We have started training our authorized dealers to certify technicians to provide service on our vehicles, which we believe will assist in facilitating adoption by fleets. We anticipate further expanding our ADN in North America.\n\nAdditionally, we had pursued, and would expect to again pursue if and when we resume production, multiple go-to-market paths to accelerate the adoption of our SDV vehicles by commercial fleet owners and operators. This includes collaborations with partners not only to develop full vehicle offerings, such as leading upfitters, but also to provide a comprehensive ecosystem of enabling capabilities and services, such as after-sales, service and Data-as-a-Service, or DaaS, in order to allow for a smoother transition for our potential customers from internal combustion engine, or ICE, vehicles to EV fleets.\n\nIf and when we resume production, we anticipate taking a measured approach to continue to allow time for customer and end-user feedback, stabilize production processes and quality assurance and, most importantly, optimize our bill of material and production costs.\n\nMarket Opportunity for SDV Vehicle Technology\n\nAccording to Morgan Stanley’s 2023 report titled “The Migration to SDVs”, the SDV market is projected to grow at a compound annual growth rate of 41% from $147 billion in 2024 to $1.16 trillion by 2030. SDV accounted for just 3% of automotive production in 2021 and may represent 90% of new vehicle production by 2029. OEMs also appear to be taking an increased interest in SDV technology and incorporating it as a part of their overall strategy. For example, in 2024, Rivian established a joint venture with Volkswagen International America Inc. and Volkswagen AG and its affiliate to build electrical architecture and software technology together for future electric vehicles. General Motors also completed its acquisition of GM Cruise Holdings LLC, which it uses to lead in autonomous and software-defined vehicles, according to its public reports. Ford Motor Company has similarly expressed, according to its public report, that electric and software-defined vehicles will play an increasingly important role for its future.\n\nWith respect to commercial vehicles, in particular, we believe the shift to electric vehicles in the North American commercial vehicle market continues to grow driven by the maturity of electric truck offerings yielding lower operating costs over time, the reduction in battery costs and improvement in charging infrastructure along with consumer preference. We believe that the global commercial EV industry is growing as well and undergoing a transformation, which we expect to continue as driven by the following factors:\n\n•OEMs are increasingly looking to integrate SDV into their vehicle line ups. We believe that amidst competition between legacy auto manufacturers and new Chinese OEMs, more legacy OEMs are looking to expedite their transition to SDV architectures. We believe that collaborating with software-defined vehicle technology pioneers allows these automakers to protect and regain market share by offering customers vehicles that are more technologically advanced with a better total cost of ownership and performance, while being able to also offer software services. REE’s philosophy of “complete, not compete” allows legacy OEMs to access our SDV technology, which they can integrate into their current and future product line across multiple vehicle categories.\n\n•Growth Anticipated in Last-Mile and Mid-Mile Delivery Market. The rise of e-commerce has led to growth in the transportation services and logistics providers that provide e-commerce services. This in turn feeds into a need for delivery vehicles with increased productivity and efficiencies. According to Statista, in the e-commerce market, the number of users is expected to amount to 4.1 billion users by 2030 and revenue in the e-commerce market is projected to reach $3.88 trillion in 2026. We believe that the durable design and added benefits of our P7 lineup positions us to compete in this market.\n\n•Autonomous driving has the potential to transform transportation. In recent years, there has been an automotive focus on autonomous driving. We have heard from potential customers that the commercial vehicle market suffers from driver shortages and autonomy is a compelling solution for fleets and operators. However, fleets and operators lack a safe, mature and reliable vehicle architecture to support autonomous driving, once they have identified a proper autonomous software provider. According to McKinsey & Company, autonomous driving could create between $300 billion and $400 billion in revenue by 2035. We believe that our successful demonstration with Airbus UpNext positions us to be a leader with autonomous-ready technology to service this market need.\n\n63\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\n•Consumer Preferences Driving EV Adoption. The shift in consumer preference is attributable to consumers’ environmental consciousness and increased awareness of the impact of global climate change, improvement in battery technology, the continuing build-out of electric charging infrastructure, increased offerings from automotive manufacturers that cater to this consumer demand and the growing comfort with EV range capabilities that is easing “range anxiety” and facilitating adoption. Furthermore, EVs present ongoing energy cost reductions as compared to ICE vehicles due to ongoing gas price volatility.\n\nREE’s Technological Differentiation\n\nIndustry Approaches and Their Limitations\n\nWe believe that the automotive industry is at an inflection point. Based on our experience, we believe that global OEMs face significant hurdles in transitioning to software-defined vehicles due to outdated vehicle architectures, which were built around mechanical systems rather than digital platforms. Their reliance on fragmented third-party software ecosystems creates integration challenges, and their vehicles’ mechanical linkages make it difficult to adopt by-wire systems without complete redesigns. Additionally, based on our experience, we understand that some OEMs lack the in-house software, AI, and cybersecurity expertise needed for SDV development. Organizational inertia and long product development cycles further hinder agility and innovation. In contrast, we built REE from the ground up with a modular, software-first approach, enabling faster integration, flexibility, and future-ready scalability.\n\nThe design of the average ICE vehicle has remained relatively unchanged over the last century. The typical format of the ICE vehicle consists of an engine positioned between the front or back wheels, with most other critical vehicle systems such as steering, braking, suspension, powertrain and control likewise located centrally between the vehicle wheels. Most EVs in the market locate these components similarly. While this vehicle format is familiar, it is subject to an inherent limitation with respect to compartment space, vehicle function, maintenance and modularity.\n\nWe believe that ICE vehicles and EV manufacturers employ a correspondingly similar strategy to the development of new vehicle platforms: vehicle functionality is determined by the OEM mindset trying to forecast and influence future market trends. This means that, during development, most ICE vehicle and EV manufacturers will design and produce individual new vehicle platforms with vehicle models being restricted as to size, shape or functionality. This, in our view, creates a less nimble development process than is required to respond quickly and effectively to changing market demand and customer/end-user preferences unless such demand corresponds with existing “off-the-shelf” offerings. As a result, in trying to address these changes in market preference, ICE vehicle and EV manufacturers are burdened by extremely high capital costs and long development cycles inherent in designing and engineering new models.\n\nREE’s Technology Approach\n\nWe address such limitations with innovation at the core of our DNA. This is what drives us throughout the development process all the way down to the architecture of every detail of our SDV design. We have developed core innovations that make up the foundation of our SDV technology offering. In particular, our SDV technology contains what we believe to be a number of key technological advancements and critical design functions that provide distinct advantages over competitor offerings. These advancements include the management of a vehicle’s operations and features through software to enable a safer and more stable means of transport. Our proprietary software manages multiple vehicle operations from vehicle dynamics and ADAS to infotainment, cabin and OTA services. This SDV technology is supported by REEai Cloud analytics, which provides real-time data analytics and calculations on the vehicle, pattern and anomaly recognition, along with built-in redundancies for advanced autonomy, including L4 capabilities.\n\nOur advanced SDV technology further utilizes ultra-fast Gen4 zonal architecture SoC to enhance redundancy, stability, and capability for future updates with cybersecurity protection features, including a design that takes into account ISO 26262 ASIL-D level standards for L4-5. Combining our software, hardware and X-By-Wire technology allows us to introduce new features and improvements via over-the-air updates throughout the lifespan of a vehicle running on our technology, granting vehicles powered by REE the ability to technologically adapt to customer, software, and market changes.\n\nFurthermore, we have designed our REEcorner® by-wire steering, braking and drive to deliver overall better stability and greater maneuverability in a vehicle, designed for better performance, which we believe produces better overall safety.\n\nWith respect to our P7 vehicle in particular, our X-by-Wire technology and progressive iterations of the REEcorner have undergone testing and validation in order to achieve a product that meets the standards, needs, and specifications of our and our ADN’s customer/end-user base. For example, we completed winter testing in cold conditions of minus 30 degrees Celsius, testing our P7 vehicle and the X-by-Wire technology therein on solid ice, testing safety, vehicle dynamics and battery performance to allow us to deliver a better product to our customers. During winter testing, we completed several verification and validation activities including ABS and Traction Control Systems, putting vehicles through cold soaks and evaluating their ability to withstand and perform even after prolonged exposure to cold conditions. We also tested charging conditions for our P7 overnight in such conditions.\n\nREE’s X-BY-Wire Technology and Zonal SDV Architecture\n\nWe deploy our x-by-wire vehicle technology and zonal SDV architecture to control a vehicle’s functions and drive through\n\na combination of software, data, and hardware.\n\n64\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nREE Software: REE’s proprietary-developed software is designed to centralize the control of the vehicle through a high-performance vehicle’s main electronic control unit, or ECU. This control enables significant development synergies by preserving core FuSa and Autosar based software development achievements including motion and stability dynamic functions and ISO 26262 and 21434. Our software further controls a vehicle’s performance and system management, including ADAS, vehicle controls, vehicle dynamics, infotainment systems, brake managements systems, and autonomous-ready systems. Additionally, during a vehicle’s drive, its data-as-a-service, or DaaS, sensors gather thousands of data points per second and communicate them for incorporation into our software along with driver behavior and analysis. Such data points could include, among others, weather conditions or other environmental conditions. Using such data, our software communicates with our hardware to administer commands with respect to the braking, steering, and driving of the vehicle. Through this method, we believe that our software can enable strong electronic stability control, or ESC, in adverse conditions and in emergency maneuvers. We have also built into our software certain fail operational design redundancies to ensure functionality is preserved in the event of a failure, should it occur. We design such redundancies in an effort to have no single point-of-failure. In addition, our software is designed in a zonal architecture that allows to connect multiple “zones” from third parties such as ADAS, telecommunication, vehicle control units, in addition to supporting multiple operating systems from different OEMs. The zonal architecture design supports our collaboration with OEMs and allows OTA updates of core components and capabilities without damaging the integrity or stability of the system. The usage of zonal architecture also allows for the allocation of redundant computing power and capabilities in the event of a malfunction without the need to have additional backup systems.\n\nREE Hardware: In collaboration with Infineon and Vitesco, we built a fast and strong SoC to power our proprietary software in a zonal architecture that reduces the number of ECUs in a vehicle. Through this we believe that it lowers costs, accelerates time-to-market for our customers, provides OTA support, and provides a technology that we design in an effort to make future-proof. Specifically, along with our zone specific ECUs, we use a combination of two main ECUs, our REEGateway ECU, and REECenter ECU hardware to form the backbone of our SDV technology.\n\nThe REECenter ECU serves as the software-defined nerve-center that synchronizes steering, braking, propulsion,\n\nand traction with a design to provide ASIL-D functional safety, cybersecurity-by-design and true fail-operational\n\nredundancy for next-generation electric and autonomous vehicles. More specifically, it provides holistic motion control by harmonizing steering, braking, acceleration and traction in real-time with an aim to provide smooth and predictive vehicle dynamics. Through dual independent inertial measurement units, or IMUs, which serve as vehicle sensors, along with wheel-speed, voltage, current, and thermal inputs, the REECenter ECU seeks to achieve millisecond-level situational awareness. Additionally, the ASIL-D safety architecture uses dual local-step compute channels, built in diagnostics and watchdogs in an effort to meet ISO 26262 standards. For redundancy, it is designed with fail-operational power and communications in an effort to keep the vehicle controllable during faults.\n\nThe REE Gateway serves as a secure data router and is designed to connect in-vehicle networks with external\n\ncloud and fleet systems. In particular, it is designed to route and secure data between all in-platform CAN networks, and “foreign” devices (LiDAR, OBD, diagnostics, OTA) to maintain controlled, prioritized communication. It runs two Infineon AURIX processors in lock-step with a dedicated watchdog, SPI, and interrupt links for fail-operational control in the event of a failure. It relies on certain security methods to build integrity and trust and supports SSL/TLS sessions for cloud links.\n\nMoving to the zonal architecture, the REEzonal ECUs are designed to consolidate and control steer, brake, and\n\ndrive functions within each vehicle zone. Such ECUs also provide capabilities to obtain over-the-air updates, provide vehicle diagnostics, and data monitoring with respect to various data sets from a vehicle. These localized ECUs consolidate and control steer, brake, and drive functions within each vehicle zone. Here as well, we have built certain fail operational design redundancies into our hardware to maintain vehicle functionality in the event of a failure, should it occur.\n\nREEai Cloud: To improve a vehicle’s drive and enhance its awareness of the surrounding environment, we have developed REEai Cloud. REEai Cloud is a software-as-a-service product that provides advanced data analytics to fleet operators for vehicle and service optimization with the aim of further reducing TCO, enhancing safety, and optimizing vehicle driving features. For example, our payload monitoring system is designed to provide fleet operators with real-time weight data calculations, potentially reducing fines that result from overweight payloads. Similarly, such monitoring system is designed to improve vehicle stability and tire wear-and-tear based upon real-time data with respect to a vehicle’s payload weight. We believe that such product can deliver more real-time data to fleet operators for actionable insights, which helps optimize their fleet performance, creating an additional revenue source for REE. We can offer REEai Cloud as a standalone product while also selling it for integration with other products.\n\nREEcorners®: Our revolutionary REEcorner® is a compact single module that integrates critical vehicle drive components (steering, braking, suspension, powertrain and control) into the area between the chassis and the wheel. Use of\n\nthese REEcorners provides for a versatile, customizable, modular platform that can be adapted to mission-specific applications. This versatility is designed to permit fleet operators, technology companies and OEMs to design and develop\n\n65\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nvehicles tailored to their specific requirements. Each REEcorner® is an independent assembly that is capable of being controlled and managed by an independent ECU, which controls corner level functions with the capability to have the REEcenter ECU coordinate all corner-level functions. REEcorner® was developed to be compatible with our X-by-Wire technology to allow for better vehicle control through each REEcorner® of the vehicle, eliminating all mechanical connections between the REEcorners® and the steering wheel and pedals in the driver cabin and the wheels and braking systems. Unlike in current vehicles, where steering, braking and acceleration are controlled through mechanical and hydraulic systems, REEcorners allow for each of these functions to be performed entirely through software wired control. Each module is independently controlled, eliminating traditional mechanical linkages. Once each of our REEcorners are positioned across the four corners of a chassis, they are designed to independently improve driving precision on the road, which we believe produces a more safe vehicle overall. Also, eliminating the steering column removes a common source of serious injury in frontal collisions. We have further designed our REEcorners to be fully redundant, facilitating fail-operational function of each REEcorner®. This technology offers customers a more responsive and smoother driving experience. REEcorner® can be integrated into full vehicles or a chassis and our approach can meet the needs across a diverse set of potential customers. REEcorners® are our IP-protected foundational technology and a key differentiator, designed to allow Powered by REE vehicles to deliver greater efficiency, lower TCO, and complete design flexibility, all while being autonomous-ready.\n\nIn sum, the key features of REE’s next-generation SDV technology include:\n\n•X-by-Wire architecture, which has been FMVSS-certified (described below) for public roads\n\n•Unified SDV architecture powered by ultra-high performance Gen4 ECUs\n\n•Adaptive vehicle dynamics learns and enhances driving, safety and stability\n\n•REEai Cloud for vehicle and services optimization and advanced data analytics\n\n•Autonomous-ready full X-by-Wire redundancy designed in a manner that draws from ISO 26262 ASIL-D level for L4-5\n\n•Core over-the-air technology with virtual security operations, cybersecurity, and real time encryption and\n\n•Virtual software development environment drastically reduces development cycles and total time to market\n\nWe believe that this approach differentiates us from other players, who we believe must often substantially redesign and reengineer their vehicles in order to meet market demand. Such actions can result in a significant time investment and required capital amounts in relation to architecture integration, unique performance requirements, different market requirements and full crash structure development and testing.\n\nIn contrast, REE’s underlying SDV technologies are clean-sheet that can be designed to work together with other potential customer, including OEMs, operating systems and proprietary designs. By leveraging more than a decade of our innovations, we believe that REE customers will be able to design new vehicle models more easily and bring them to market in less than the traditional amount of time needed. Doing so allows us to meet our customers where they are and adjust our product offerings into a design or system that a potential customer currently uses and/or seeks to develop/build in the future.\n\nEach of the aspects of our technology described above layers on benefits to a potential customer, however they are built to be stand alone. We believe that when each of these are combined together it provides a customer with the greatest set of long-term competitive benefits that we can offer in terms of versatile, customizable, modular platforms that can be adapted to mission-specific applications. With this level of versatility, we believe that it provides fleet operators, OEMs, and other customers alike the ability to design and develop vehicles tailored to their particular requirements while seeking to reduce the total cost of ownership.\n\nFurther highlighting our innovation, we were named a CES 2025 Innovation Award® Honoree for our SDV technology and were awarded Frost & Sulivan's 2025 Company of the Year award in the North American Electric Medium-Duty Vehicle Platform Industry category.\n\nREE’s Products\n\nREE’s goal is to serve counterparties and customers with a range of electric and SDV solutions, including X-by-Wire systems, zonal SDV architecture, software services, complete commercial EVs, stripped chassis, and REEcorner® modules. REE provides different paths to partner with it to construct SDVs. These paths range from licensing its SDV technology, SDV engineering partnerships, all the way through full vehicle engineering and production partnerships. Having this range of offerings allows a customer to either (i) build mission-specific vehicles built on REE SDV technology, which they can tailor to their vehicle size, design, power-source, and driving mode (i.e., it is autonomous-ready) needs, and/or (ii) to receive an EV commercial vehicle that offers the benefits of SDV technology, EV, modularity, among other benefits, in a prepackaged solution.\n\nAs an initial product, we had designed and previously launched the P7 lineup in an effort to present our SDV technology through a prepackaged commercial vehicle to provide a technological demonstration for how our technology can be implemented and showcased in practice in an actual vehicle. Due to what we believed to have been unforeseen and unpreventable circumstances surrounding U.S. trade policy with respect to tariffs and trade wars, we paused our production\n\n66\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nplans with respect to our P7-S Strip Chassis and P7-C Chassis Cab and Cutway Chassis products until the situation stabilizes. Prior to this production pause, as part of the commercialization of our P7 lineup, we had built out a network of carefully curated authorized dealers, which we refer to as our Authorized Dealership Network, focusing on those that have embraced the EV future of commercial vehicles and that were in geographic areas of high demand. In certain cases, our Authorized Dealer Network, were located in states that provided their own tax incentives. Through such network, we had expected to provide sales and service points to the fleet customers across North America.\n\nAs further described below in our Go-to-Market strategy section, since our production pause, we advanced our Phase 2 software business and focused our efforts on securing proof-of concepts, design wins and/or partnerships with OEMs and technology companies with respect to the integration of our SDV technology products into their vehicles. Licensing REE’s SDV technology allows OEMs and technology companies to design and build vehicles tailored to their specific requirements by deploying REE’s zonal SDV architecture, x-by-wire, and proprietary software packages of advanced vehicle dynamics, chassis control, body control, autonomy integration, safety systems, and connectivity. Such potential customers can also integrate REE’s steer-by-wire, brake-by-wire and drive-by-wire independent wheel control into their own vehicle functionalities, platforms, and applications, including autonomous applications. Through a partnership with REE, these customers can likewise collaborate on the design and development of vehicle prototypes and road-ready vehicles based on our proprietary SDV technology. Such projects can include collaboration between the engineering teams of REE and the customer to transform existing traditional vehicle infrastructures and designs into software-defined models.\n\nPowered by REE Solutions\n\nREECore\n\nThrough a license of our unified zonal SDV architecture and x-by-wire technology, OEMs and technology companies can power motion, safety, power, and connectivity, which can also be adapted to multiple vehicle classes and platforms. This technology includes built-in diagnostics, OTA update capabilities, and fleet data integration. Through a REECore partnership with REE, OEM engineering teams work collaboratively with REE’s staff to convert their traditional commercial vehicles into next-generation commercial vehicles that are designed to be smarter, safer, and upgradable cloud-connected software-defined trucks. The deployment of our REE zonal architecture ECU design simplifies the integration and reduces the hardware complexity to allow OEMs to standardize across multiple vehicle platforms. This product’s built-in cybersecurity, AI-driven serviceability, and continuous OTA updates are designed to provide a future-proof foundation for autonomous and connected capabilities. Through a REECore partnership, OEMs receive a tested, road-ready SDV solution that is designed to accelerate their time-to-market without compromising safety or performance. Moreover, this product is designed to reduce downtime, lower the total cost of ownership, and unlock new data-driven revenue for OEMs and technology companies alike.\n\nREEautonomy\n\nCustomers can deploy our REEcorner® technology to enable independent steer-by-wire, brake-by-wire and drive-by-wire wheel control across different means of autonomous transportation. This technology allows for more precise maneuverability and real-time adaptability while integrating into third party autonomous algorithms that operate the mode of transport. For customers interested in launching autonomous transportation, REE’s technology provides certain key advantages, including:\n\n•Integrated hardware and software that combines REE’s zonal architecture, x-by-wire systems, and embedded intelligence for AV readiness in an effort to provide more safe and scalable autonomy,\n\n•Autonomous intelligence, which provides advanced sensing, artificial intelligence, and data fusion to enable reliable real-time decision-making,\n\n•Improved safety features through an ASIL-D compliant architecture that includes redundant, fail-operational design and built-in cybersecurity, and\n\n•A scalable platform that is designed to support Level 4-5 autonomy and that is adaptable across commercial fleets and diverse vehicle platforms.\n\nThrough REE’s configurable drive-by-wire architecture, customers deploying autonomous software can obtain more precise control, along with a manual override as an added safety precaution. This technology likewise integrates with third party hardware and sensors, providing a real-world test environment for autonomous algorithms.\n\nREEmotion By-Wire\n\nOur in-house specially designed EV commercial Class 4-5 truck is built upon our SDV technology that combines our software, hardware, and REEcorners into a single solution for our customers. We designed this particular product in an effort to present our SDV technology through a prepackaged commercial vehicle ready for fleets to purchase off the shelf.\n\n67\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nIn doing so, we sought to provide a technological demonstration for how our technology can be implemented and showcased in practice in an actual vehicle that is ready and certified for public roads. As part of its design, we incorporated EV technology to add an additional element for fleets seeking to electrify, however our underlying SDV technology is agnostic to a vehicle’s size, design, power-source, and driving mode (i.e., it is autonomous-ready), making it adaptable, including to non-EV vehicle designs. While EV produces additional benefits, including potential regulatory incentives, we believe that our commercial truck product value-add provides much more compared to the current commercial trucks in this class.\n\n•P7-S Strip Chassis – Fully flat from end-to-end, the P7 modular platform, or the P7 Platform, is enabled by the REEcorner and designed for commercial delivery vehicles, autonomous vehicles and walk-in vans. The P7 Platform enables efficiencies for fleets, offering a low, fully flat chassis for vehicles in Classes 4-5 designed with smart predictive maintenance and reduced downtime to optimize TCO. EVs and autonomous vehicles built on top of P7 Platforms are designed to achieve optimal driving ranges with regenerative braking for last-mile delivery, all-wheel steering and improved maneuverability for urban environments. Upfitters and other manufacturers looking for full design freedom can also leverage the modularity of REE’s stripped chassis or chassis cabs for maximum design flexibility on specialty equipment applications.\n\n•P7-C Chassis Cab and Cutway Chassis – Based upon our P7-S, our P7-C is a Class 4 and 5 chassis cab, a fully electric commercial truck, available in regular bulkhead and walk-through, and cutaway variants. Used for applications such as delivery and a broad range of vocational applications, it is the first fully by-wire vehicle to obtain FMVSS certification in the U.S. Powered by REE® P7-C vehicles have an all-wheel steer and optimal maneuverability for compact, urban environments. Enabled by REEcorner® and by-wire control, P7-C vehicles are designed to provide major advantages to fleet owners such as reduced TCO with smart maintenance and REEcorner service replacement, which we estimate can occur in under one hour, improved safety and maximized efficiency. Partnerships with bodybuilders such as The Knapheide Manufacturing Company, or Knapheide, and Wabash Parts and Services for P7-C are aimed to ensure that full-vehicle solutions for box trucks, service bodies, platform bodies and more can be offered to fleets by dealers.\n\nEach of the component systems that form our REEcorners® and P7 chassis are engineered in an effort to achieve optimal performance. We place a strong emphasis on functional integration, allowing for increased modularity. This is aimed to reduce the total number of parts and platform size, ultimately providing more usable interior space in the vehicle cabin and a more cost-effective offering. By leveraging our modular REE products, along with our efficient design and streamlined production process, we anticipate that new vehicle models can generally be developed and produced in 24 to 36 months, however specialized specifications and requirements from customers such as OEMs could require additional time, depending on the technical specifications and customization. We had been developing core hardware and software technologies for our REEcorner® both in-house at our UK Integration Facility and pursuant to development agreements with certain strategic partners, with the goal of achieving superior vehicle dynamics while raising the bar for safety. See the discussion of “Vehicle Production Prior to Production Pause” below for the current status of these vehicles.\n\nOur Competitive Strengths\n\nWe believe that our disruptive SDV technology and value proposition are unique to the industry and will offer a number of competitive strengths.\n\nAttractive value proposition, safety, and superior total cost of ownership\n\nOur SDVs aim to have lower TCO than ICE vehicles. We believe that vehicles built on our products will have a lower TCO than those of our competitors, which can enhance customer and end-user satisfaction. More specifically, we expect to derive our TCO advantages from our asset-light production model, low costs of operations due to anticipated greater cargo volume, and lower maintenance costs due to predictive maintenance and the REEcorner’s durable design. We plan to work with strategic partners to integrate into their products our predictive data services through smart service and artificial intelligence in combination with over-the-air updates that seek to ensure maintenance is performed before a part may fail. Specifically, our REEai Cloud product relies upon real-time data and historical usage patterns, as drawn from our SDVs, to predicatively seek to identify when the wear and tear to an SDV vehicle part may require maintenance. Such predictive maintenance can assist operations managers seeking to optimize their operations in order to avoid unscheduled maintenance events that are costly and disruptive to their fleets. Through our predictive maintenance, we believe that it can provide fleet managers with the information to allow them to better schedule a particular vehicle’s route around when a part is predicted to require service. We believe that such advanced warning systems could provide savings by eliminating unnecessary part replacements, reduce downtime for vehicle repairs, and improve the lifespan of the vehicle.\n\nFurthermore, we have designed a fully flat EV platform reliant upon our SDV technology, purposefully engineered with the goal of maximum space efficiency and modularity to support a wide range of vehicle applications in the business-to-business (B2B) market. We believe that platforms using REEcorners will present significant functional and operational advantages over conventional “skateboards” currently available in the market and will enable superior vehicle specifications for cargo volume/length, payload, maneuverability and battery capacity. Our technology is also designed to\n\n68\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nenable enhanced operational efficiencies due to a low center of gravity, high durability, long lifecycle and superior product ergonomics. For example, low step-in height affords easy and fast embarking and disembarking from vehicle and we are able to provide high driver visibility due to enhanced field of vision and optimal driver ergonomics.\n\nOur development of FMVSS, EPA, CARB, and HVIP certified X-by-Wire software control technology challenges century-old automotive concepts. We expect that our X-by-Wire control technology will enable lower TCO through expedient REEcorner® replacement, referred to as the Quick REEcorner® swap, smart preventative maintenance and over-the-air updates, and improved residual value per truck given our efforts to future proof each vehicle through, among other capabilities, autonomous driving ready capabilities and the ability to receive new software, and software updates as they become available. Our REEai Cloud data analytics capabilities may be used to further reduce TCO via intelligent preventative maintenance features.\n\nOur track record of invention and early development of our products has afforded us many years to innovate across hardware and software, which we believe has created substantial advantages in our targeted markets as a result of our industry know-how and proprietary trade secrets. Our research and development efforts have resulted in a strong intellectual property portfolio, and we have filed for patent protection for several of our key inventions across key markets of the world, resulting in, as of May 4, 2026, approximately 177 active or pending patent applications for SDV products, component systems, X-by-Wire, testing and enhanced product manufacturability, of which approximately 100 are granted patents and utility models. Granted patents are related to (i) unique suspension, steering, powertrain, and brake systems, (ii) corner modules encompassing vehicle subsystems for controlling the operation of the vehicle, (iii) installation and swapping of corner modules, (iv) communication and control systems for operating individual corner modules and vehicle platform, (v) flat chassis designs, (vi) and manufacturing and testing methodologies.\n\nImproved safety and security\n\nAdditionally, we believe that our REEai Cloud predictive technology can improve safety for vehicles running on its technology. Specifically, through our real-time data collection, our technology gathers various data points across the components of a vehicle. Through such collection, our predictive technology seeks to identify parts that require immediate repair, such as an engine issue, and to relay this information in real-time to fleet managers to remove a vehicle from operation. Through the gathering of such data, we believe that it allows fleet operators to better respond in real-time to safety issues that affect a particular vehicle and to use such data to prevent a vehicle with faulty parts from going out onto the road. Furthermore, through our data collection we have designed our technology to attempt to identify, in certain instances, vehicle behaviors that increase safety concerns. For example, we can collect data with respect to a vehicle’s weight and turn radius, the combination of which, if maneuvered inappropriately and too quickly, can lead a vehicle to flip over. Through such data points, our predictive technology is designed in a manner to communicate with our SDV system to deter actions that may otherwise flip a vehicle.\n\nCapEx-light and flexible production approach\n\nPrior to our production pause and UK property lease assignment, we had sought to produce our REEcorner® in our Global Integration Center in Coventry, UK. REEcorners® were designed for ease of manufacture, and to benefit from our capex-light strategy through a fully commissioned production line. Previously, this product line had thirteen robotic stations run by only seven operators, and offered a production capacity of 40,000 REEcorners® (10,000 vehicles) annually based on a single shift per day. Our production line had been commissioned at above the current required capacity and could have been duplicated quickly to support any future expansion needs.\n\nOutside of producing our core technology as a technology company, we had sought to partner with other leaders for the\n\nproduction and assembly of our P7 vehicle lineup. To that end, in 2024 we entered into a strategic partnership with\n\nMotherson Group, one of the largest automotive component manufacturers with operations in more than 400 facilities\n\nacross 44 countries globally. Through this partnership we had expected Motherson Group to manage our global supply\n\nchain and drive operational and manufacturing improvements, impacting our production line, supply chain management,\n\nbill of materials, and cost structure. Motherson Group was also intended to enable us to scale faster while\n\navoiding common operational challenges faced by others in the automotive space.\n\nIn addition, in 2024 we had contracted with Roush Industries Inc. to assemble our P7 lineup in its U.S. facilities in\n\nMichigan. Prior to our production pause, we had begun the necessary preparations at Roush’s Michigan facility for\n\ndeliveries to the North American market such as tooling with respect to the assembly of Powered by REE® vehicles. In\n\ntandem, we had commenced the production of our initial vehicles for delivery. We had expected that following the\n\ncompletion of the assembly and integration preparations at the Roush facility, to ship our REEcorners to such location for\n\nfull vehicle assembly.\n\nThrough our production approach, we had sought to reduce our up-front capital investment and eliminate recurring fixed costs and overhead that would be required for us to own and operate our own product assembly facilities. We believed that this would have otherwise enabled us to remain a comparatively asset-light enterprise, which would have further helped to increase our operating margin and overall return on investment.\n\nIn the future, leveraging the flexibility inherent in the REEcorner® design, we have the ability to scale up or down from the Class 4 and 5 market that we serve today.\n\n69\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nLowering Acquisition Costs\n\nWith capital efficiency in mind, as we have noted above, we seek to “complete not compete”.\n\nPrior to our production delay, we supported and incentivized, and if and when we resume production, we would expect\n\nto support and incentivize, our ADN in certain ways that further enhance their economics for selling our vehicles with the\n\ngoal of lowering acquisition costs. For example, we seek to create brand awareness for our Authorized Dealers through our\n\nbrand and SDV technology promotional efforts, including through social media campaigns, trade shows, and other\n\ndemonstrations, while also providing each of our Authorized Dealers with the necessary marketing materials, presentations,\n\ndiscount product options, and sales and product trainings to aid them in their sales efforts. In order to provide customer\n\nservice, we are leveraging our ADN to provide after-sales parts and service. We believe that this provides Authorized\n\nDealers with parts and service revenues to help drive profitability and allows them to be partners to the fleets in their\n\nservice areas with respect to our vehicles. We have started training our authorized dealers to certify technicians to provide\n\nservice on our vehicles, which we believe will assist in facilitating adoption by fleets. We anticipate further expanding our\n\nADN in North America.\n\nAdditionally, we had pursued, and would expect to again pursue if and when we resume production, pursuing multiple\n\ngo-to-market paths to accelerate the adoption of our SDV vehicles by commercial fleet owners and operators. This includes\n\ncollaborations with partners not only to develop full vehicle offerings, such as leading upfitters, but also to provide a\n\ncomprehensive ecosystem of enabling capabilities and services, such as after-sales, service and Data-as-a-Service, or DaaS,\n\nin order to allow for a smoother transition for our potential customers from internal combustion engine, or ICE, vehicles to\n\nEV fleets.\n\nIf and when we resume production, we anticipate taking a measured approach to continue to allow time for customer\n\nand end-user feedback, stabilize production processes and quality assurance and, most importantly, optimize our bill of\n\nmaterial and production costs.\n\nKey Certifications\n\nIn September 2023, we obtained a certification from the U.S. Environmental Protection Agency for our P7-C vehicles. In\n\nJanuary 2024 of the following year, upon the completion of a test program, which included third party evaluation, we\n\nbecame the first in the U.S. to obtain a FMVSS certification on our P7-C through the self-certification process for a fully\n\nby-wire vehicle of any category. Following this, in March 2024, we obtained two certifications from the California Air\n\nResources Board, or CARB, on our P7-C. The two certifications include (1) Phase 2 Greenhouse Gas, or GHG, covering\n\nthe complete vehicle and (2) the new Zero Emission Powertrain, or ZEP certification. Obtaining these certifications\n\nenabled our P7-C to qualify for applicable incentives in California and other states that follow CARB guidance. In\n\nFebruary 2025, our P7-C was approved for California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive\n\nProject, or HVIP. We believe that each of these achievements further demonstrates the strength of our SDV technology while also providing an additional means, to the extent applicable, for customers to potentially lower their TCO through\n\ncertain incentive programs.\n\nREE’s Go-To-Market Strategy\n\nGo to Market Strategy\n\nWe plan to provide our SDV technology, including REEcorner™ technology and Powered by REE™ platforms on top of which companies can then build their ideal vehicles customized to their specific requirements. Additionally, we aim to provide complete commercial EVs through partnerships with our ADNs, OEMs and top-hat upfitters. In regard to the latter, we believe that we are well-positioned in the EV commercial vehicle market relative to our competitors due to better unit economics, improved safety and security, and TCO advantages including lower vehicle operational costs and lower maintenance costs. Furthermore, we believe that fleet operators will be drawn to the customizable design of our products, which seek to facilitate mission-specific vehicles to optimize fleet utilization. Fleet usage, which most times may involve multiple shorter trips within range of a central base rather than long-distance travel, can reduce the “range anxiety” that has also been a limiting factor in EV adoption.\n\nREE’s go-to-market strategy is structured in two phases that continue in parallel to one another with points of overlap. As part of Phase 1, we seek to gain market traction for Powered By REE technology and to demonstrate to potential customers, dealers and OEMs alike, the ability to deploy our SDV technology in an actual vehicle that is public road-ready and certified. As part of this strategy, we are focused on the North American market across the U.S. and Canada for a full vehicle solution. We planned to have our P7 vehicle obtain certifications, including those relating to FMVSS and the EPA. Concurrently, we planned to demonstrate the ability of our SDV technology to function as autonomous-ready and the\n\n70\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\ncapability of our SDV technology to work together with autonomous software in an actual vehicle. The goal throughout this phase is to form strong customer relationships with dealers and commercial fleet operators and to then build a system in order to deliver Powered by REE® vehicles to them in production partnership with a contract manufacturer and supply chain support.\n\nThe second phase of our strategy focuses on collaborating with OEMs and technology companies globally, and licensing our SDV technology to power each of their next-generation vehicles that may be built across various vehicle sizes, design, power-source, and driving modes. This second phase provides us with additional opportunities for specification and customization with OEMs, and we believe that it may produce higher margins and recurring revenue, based upon our initial market research and interest from OEMs and technology companies. Also as part of this second phase, we would seek to provide a suite of value-added services through software subscriptions, including through OTA updates.\n\nSpecifically, in contrast to production, which requires ongoing supplier-related costs, including the sourcing of parts and components for vehicle assembly and a dedicated space and the labor to ultimately assemble a vehicle, licensing requires a software connection point and a customer’s system compatibility with our SDV technology, now that it is developed, tested, and road-ready. As a result, we believe that licensing of this technology to OEMs will provide a more lucrative value proposition (although our ability to execute this strategy will depend on our financial condition, access to capital, and the outcome of any strategic or restructuring actions) than the sale of our P7 lineup in the long-term, including through a subscription-based revenue model. Moreover, licensing provides us with additional opportunities for customer specification and customization, which can likewise add additional margin with typically less significant changes to our proprietary software to run our SDV technology on a customer’s system.\n\nAdditionally, with respect to recurring revenues, we anticipate that proof-of-concepts, design wins and/or partnerships with OEMs or other technology companies can present opportunities for non-recurring engineering, or NRE, arrangements and royalty revenues in connection with vehicles built upon our technology. In particular, we believe that partnerships with OEMs and technology companies can include NRE arrangements pursuant to which we are reimbursed for a portion of the design, development and testing expenses associated with integrating our SDV technology with our customers’ systems. We further believe that following a design win and the integration of our software and SDV technology into OEM vehicles, it presents a longer-term opportunity for recurring revenues from the SDV technology license once such vehicles are sold to end-users.\n\nTwo Phase Implementation\n\nTo implement Phase 1 of our go-to-market strategy effectively, prior to our production pause, we had sought to foster relationships with dealers and fleets (including as accessed through such dealer networks), and to have such dealers join our registered Authorized Dealers, with fleets then able to purchase vehicles from them. Additionally, over 2024, we delivered several P7-C demonstration trucks to specified ADNs in North America to showcase their features for fleet evaluations. We sought to demonstrate that the customizable architecture provided through both our complete commercial truck and stripped chassis supports mission-specific builds and what we believed to be more efficient fleet utilization. Our expectation was to see growth in fleets seeking to electrify and to use more efficient methods to manage their fleets. Fleets can accomplish this by cutting down time from vehicles repairs, which we believed that our EV vehicle addressed, including through the REEcorner® repair and/or predictive maintenance offering. We had planned to provide REEcorner® technology and Powered by REE® EV platforms for companies to build their ideal vehicles customized to their specific requirements.\n\nSpecifically, we value the strategic importance of vehicle production, which we believe primarily serves as a technological demonstration of the application of our SDV technology in practice and as a method to produce our P7 products to address what we believe to be a near-term demand for commercial fleets looking to electrify. For these reasons, as part of our Phase one implementation, we had built our UK Engineering Center and REE’s Integration Center at Coventry, UK for the design, validation, verification, testing, homologation, and assembly of our products, including our REEcorner.\n\nFurthermore, during 2024, we entered into a partnership with Roush for the assembly and integration of our products as our contract manufacturer at their Michigan facility. Roush was intended to provide a strong U.S. presence to bring our products to the North American market. With respect to our supply chain, in September 2024, we executed a supply chain management services agreement with Motherson, pursuant to which we appointed Motherson provide services relating to development, management, and optimization of our supply chain. This included supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration.\n\nIn addition, during 2024, we had made progress in obtaining interest in, and support of, our SDV technology vehicle through additional partnerships. For example, Penske performed demonstrations of our P7-C truck upfitted with a Wabash body, and U-Haul received one of our products and has evaluated it as a solution to electrify its fleets. Additionally, Knapheide showcased our P7-C with a KUV body, which was aimed to provide benefits including low load floor, greater driver maneuverability and comfort and high driver visibility. Additionally, Mission Mobile had signed a non-binding agreement with us to build a mobile healthcare fleet using REE trucks—highlighting our SDV technology’s versatility across applications.\n\nWe also previously obtained EPA certification for our P7-C chassis cab and P7-S stripped chassis products in 2023. Moreover, in 2024, we became the first company in the U.S. to achieve FMVSS certification on a vehicle controlled fully\n\n71\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nby wire. We further achieved CARB certification in 2024. We believe that these achievements demonstrate the strength of our technology.\n\nTo round out our implementation of Phase 1, we partnered with Airbus Upnext, which sought a by-wire system for its autonomous airplane taxiing driving system. In partnership thereto, Airbus Upnext successfully tested an autonomous shuttle built on our SDV technology in 2024. This successful test demonstrated that our SDV technology can provide the actual autonomous results that we set out to promote when designing our technology to be autonomous-ready.\n\nBy the end of 2024, we had secured reservations from approximately 25 Authorized Dealers. We had used such Authorized Dealers in an effort to market to their sales network of around 200 potential fleet customers. We also previously entered into an arrangement to serve as a qualified vendor under a four-year Sourcewell contract, giving over 50,000 government and educational entities access to our SDV trucks.\n\nWith regard to Phase 2 implementation, during 2024, we previewed our SDV technology with several OEMs, and during 2025, we delivered a prototype to an OEM in connection with their design requests. We also shared concept designs with other OEMs as part of this strategy. Moreover, we signed the March MOU with a leading technology company, and converted it into a definitive agreement in December 2025, which if commenced following the fulfillment of several conditions, can lead our entry into the autonomous shuttle market. As a continuation of this strategy, we had aimed to grow our customer base by continuing to market our SDV technology products to OEMs and technology companies in an effort to secure customer partnerships and design wins.\n\nAs we continue Phase 2, we aim to continue dialogue with OEMs based on our current positive market traction and to work toward the sharing of concept designs, building of prototypes, and ultimately working to secure design wins from OEMs to incorporate our technology into their vehicle lineup. See our risk factor in Item 3.D. titled “We invest significant effort and money seeking customer, including OEM, selection of our products and there can be no assurance that these efforts will result in the selection of our products...”\n\nCompetition\n\nWe believe that our business differentiates us from competitors because we can market and sell our products individually, such as our P7-C, or as an SDV technology solution, which allows OEMs and technology companies to design a vehicle specifically tailored toward their needs while integrating our SDV technology at the vehicles core. We believe the primary competitive factors in our market will revolve around, but not be limited to, the following key differentiation factors:\n\n•Technological innovation;\n\n•Product quality and reliability;\n\n•Safety features;\n\n•Market adoption;\n\n•Service options;\n\n•Product performance including through our real-time data analytics for fleet management;\n\n•Design and styling;\n\n•Product price; and\n\n•Production efficiency.\n\nWe believe that our products will strongly compete in the SDV, EV, and AD markets based on these factors.\n\nEnvironmental, Social and Governance (ESG) Practices\n\nAs an automotive technology company with a vision to become the cornerstone of tomorrow’s zero-emission EVs, we are committed to operating in an ethical and sustainable manner while maximizing our ability to positively impact our environment and society. We are building the foundation of a leading environmental, social, and governance, or ESG, program that benefits all our stakeholders including, customers, partners, employees, and the communities where we work. We are committed to aligning with leading industry best practices and are establishing company-wide policies that outline the Company’s standards for all business operations. For example, our corporate governance is guided by a Code of Business Conduct and Ethics, which we make available on our website. Our ethics policies are supplemented by training courses on ethical standards and a Whistleblower program to report any concerns.\n\nWe endeavor to respect, value, and empower our stakeholders. In addition, we seek to protect the communities in which we operate. Within each community, we endeavor to protect our employees’ and neighbors’ health and safety, being good citizens, and respecting business ethics. Innovation and collaboration are at the core of our business, and we extend these values to how we interact with the local communities where we operate.\n\nWe embrace and celebrate the unique experiences, perspectives, and cultural backgrounds that our employees bring to the workplace. We endeavor to recruit a workforce that reflects the diversity of the communities in which we operate, including the gender and ethnic diversity of job applicants, new hires, and senior management and we review our efforts with respect to such diversity. We strive to foster an environment where our employees feel respected, valued, and empowered, and it is a shared responsibility of all employees, including our management team, to create a supportive and inclusive workplace culture.\n\nIntellectual Property\n\n72\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nGeneral\n\nOur ability to protect our intellectual property is paramount to our business. We rely upon a combination of protections afforded to owners of patents, designs, copyrights, trade secrets, and trademarks, along with employee and third-party nondisclosure agreements and other contractual restrictions to establish and protect REE’s intellectual property rights. In addition, industry know-how and unpatented trade secrets in the fields of research, development and engineering are an important aspect of our business by ensuring that its technology and strategic business assets remain confidential. We pursue patent protection when we develop a patentable invention and the benefits of obtaining a patent outweigh the risks of making the invention public through patent filings.\n\nPatents\n\nAs of May 4, 2026, we had approximately 177 pending and registered patents in the U.S. and globally, of which approximately 100 are granted and utility models. In addition, we have six (6) families of design patents registered globally. Our patent applications are directed to, among other things, EV products, component systems, x-by-wire and enhanced product manufacturability, for example, corner modules, flat chassis, electrical and control systems, brake and steering systems, wheel assemblies, and testing. We generally review our development efforts to assess the existence and patentability of new inventions, and we may file additional patent applications when we determine it would benefit our business to do so.\n\nTrademarks and Service Marks\n\nWe have pursued global registration of our domain names and products and services trademarks. We use registrations to protect trademarks used in our business as well as claim common law protections for other marks we use in our business. Competitors and other companies could adopt similar marks or try to prevent us from using our marks, consequently impeding our ability to build brand identity and possibly leading to customer confusion. As of May 4, 2026, we have successfully registered trademarks for “REE” and “R3E” logo in approximately thirteen (13) jurisdictions and also have trademarks for “REEcorner” and “Powered by REE” registered and/or pending across various jurisdictions globally.\n\nGovernment Regulation\n\nLaws in the U.S.\n\nCertain of our products are, or may become subject to, the U.S. National Traffic and Motor Vehicle Safety Act, as amended, or Safety Act, and numerous regulatory requirements established by the National Highway Traffic Safety Administration, or NHTSA, an operating administration of the U.S. Department of Transportation, or DOT, including applicable FMVSS standards. We must also comply with all of NHTSA’s applicable U.S. Federal Motor Vehicle Safety Standards, or Safety Standards. Additionally, under the Safety Act, if and when we resume production, we must certify that our vehicles meet all applicable Safety Standards, as well as the NHTSA bumper standard, or are otherwise exempt from such standards prior to our vehicles being sold in the U.S. The categories of Safety Standards that apply to our vehicles would include crashworthiness requirements, crash avoidance requirements, and EV-specific requirements.\n\nWe are also required to comply with or demonstrate exemptions from other requirements of federal laws administered by NHTSA and certain state laws, including the Federal Corporate Average Fuel Economy, or CAFE, standards, Theft Prevention Act requirements, consumer information labeling requirements, Early Warning Reporting requirements regarding warranty claims, field reports, death and injury reports and foreign recalls, and owner’s manual requirements. We also must comply with laws relating to defects related to motor vehicle safety, recall requirements, reporting required notices, bulletins, and other communications.\n\nIn 2023, we became the first company to achieve FMVSS certification on a vehicle controlled fully by-wire. There are regulatory changes being considered for several FMVSSs, however on January 20, 2025, the Trump Administration issued an executive order delaying the approval of final rules, which affected the proposed rules for several FMVSS.\n\nIf and when we resume production, our P7-C may be subject to the Clean Air Act, as administered by the EPA, and the California Air Resources Board, or CARB, certification for vehicle greenhouse gases and zero emission powertrains. This requires that we obtain an EPA-issued Certificate of Conformity and a CARB executive order with respect to the emissions for our vehicles. We obtained the EPA certification in late 2023, achieved CARB certification in March 2024, and the California HVIP approval in February 2025. Additionally, additional warranty, durability, and other “zero-emission vehicle assurance measures” may be required for vehicles certified to Advanced Clean Cars Two standards and sold in California. Other states may adopt similar standards.\n\n73\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nThe battery modules on our P7 vehicles, if and when we resume production, may need to conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries, which may present a risk in transportation. The governing regulations, which are issued by the Pipeline and Hazardous Materials Safety Administration, are based on the UN Recommendations on the Safe Transport of Dangerous Goods Model Regulations and related UN Manual Tests and Criteria. The regulations vary by mode of shipping transportation, such as by ocean vessel, rail, truck or air. If and when we resume production, we may use lithium-ion cells in the high voltage battery packs in our vehicles. The use, storage, and disposal of the battery modules is regulated under federal law.\n\nWe may also be subject to “Right to Repair” laws, which may require us to provide third-party access to our network and/or vehicle systems.\n\nEmissions Credits\n\nIf and when we resume production, if we were to deploy batteries to fully power our vehicles, we may be able to generate credits from regulatory standards that we can monetize through the sale of our products, including in California and other states that have adopted the California standards applicable to light-duty and medium-duty vehicles, The EPA and NHTSA also set minimum GHG emissions and CAFE standards applicable to light- and medium-duty vehicles. These federal regulations require that manufacturers of light- and medium-duty vehicles meet minimum standards pertaining to GHG emissions and fuel economy based on a vehicle’s footprint or overall dimensions.\n\nIn addition, in 2022, the EPA reinstated California’s ability to establish its own vehicle emission standards in lieu of the federal standards. These standards, which have also been adopted by “Section-177” states, provide additional credit generating opportunities beyond the federal programs. President Donald Trump’s executive order titled “Unleashing American Energy”, which was signed on January 20, 2025, may have direct implications on the policies and regulations that impact the automotive and transportation industries. This order seeks to rescind waivers granted by the EPA for California's zero emission vehicle regulations with a focus on eliminating any “electric vehicle mandates” and terminating “state emission waivers that function to limit sales of gasoline-powered vehicles”, and modify and/or eliminate the greenhouse gases, or GHG, standards for applicable to certain trucks. As a result, the status of U.S. emission regulations and tax incentives remains uncertain at this current time.\n\nFederal and State Incentives in the United States\n\nThe federal government in the U.S. may from time-to-time use certain incentive programs to encourage the adoption of alternative fuel vehicles, including tax exemptions, tax credits, exemptions, and special privileges. Additionally, a number of states and municipalities in the U.S. likewise may from time-to-time offer incentive programs to encourage the adoption of alternative fuel vehicles, including tax exemptions, tax credits, exemptions, and special privileges. The actions and policy changes by the Trump Administration have created uncertainty with respect to such incentives and credits. On July 4, 2025, the Trump Administration signed the reconciliation bill, commonly known as the One Big Beautiful Bill Act, or OBBBA, into law. Among other items included therein, OBBBA ended EV charging infrastructure tax credits and certain tax credits for electric vehicles.\n\nInternational Laws\n\nAdditionally, our P7 vehicles are not currently subject to non-U.S. safety, environmental and other regulations. Many of those regulations are different from those applicable in the U.S. and may require redesign and/or retesting, if and when we resume production. For example, the E.U. has established new approval and oversight rules requiring that a national authority certify compliance with heightened safety rules, emissions limits and production requirements before vehicles can be sold in each E.U. member state. These changes could impact the rollout of new features in Europe.\n\nSimilarly, as a global company deploying cutting-edge technology, we are also subject to trade, export controls, customs product classification and sourcing regulations. Our operations also are subject to various federal, state and local laws and regulations governing the occupational health and safety of our employees and wage regulations. We are subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable state laws that protect and regulate employee health and safety.\n\n74\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\nADAS Regulations\n\nWe have also equipped our products with certain autonomous driving readiness features. Generally, laws pertaining to autonomous driving are evolving globally, and in some cases may create restrictions on advanced driver assistance or autonomous features.\n\nWhile there are currently no U.S. Federal Motor Vehicle Safety Standards specifically pertaining to autonomous vehicles or autonomy equipment, NHTSA has published recommended guidelines on autonomous vehicles and retains the authority to investigate and/or act on the safety of any vehicle, equipment or features operating on public roads. NHTSA also published its Standing General Order (as amended on April 24, 2025) that requires reports regarding certain crashes involving vehicles with ADAS, which includes motor vehicle and equipment manufacturers of which REE may be included under. On January 15, 2025, NHTSA published a Notice of Proposed Rulemaking detailing its proposal for the ADS-equipped Vehicle Safety, Transparency, and Evaluation Program, however its status is currently uncertain under the Trump Administration. Certain U.S. states also have legal restrictions on the operation, registration or licensure of autonomous vehicles, and other states may be considering similar restrictions. This regulatory patchwork increases the legal complexity with respect to autonomous vehicles in the U.S.\n\nIn markets that follow the regulations of the United Nations Economic Commission for Europe, some requirements restrict the design of advanced driver assistance or autonomous features, which can compromise or prevent their use entirely. Other applicable laws, both current and proposed, may hinder the path and timeline to introducing such features in the markets where they apply.\n\nGeneral Governing Laws\n\nLike all companies operating in similar industries, we are subject to environmental laws and regulations, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; and the remediation of environmental contamination. Compliance with these rules may include the need to obtain permits, licenses, and other government approvals from one or more governmental agencies to conduct our operations and sell our products, which includes allowing inspections of our facilities and products. The requirements vary depending on the location where our regulated activities are conducted. The failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of investigatory and remedial obligations, and the issuance of orders enjoining some or all of our operations in affected areas. For additional information, see our risk factor titled “REE’s products will make use of lithium-ion battery cells, which can be dangerous in certain circumstances” and “REE is subject to various environmental laws and regulations” in Item 3.D. “Risk Factors.”\n\nC. Organizational Structure\n\nName of SubsidiaryCountry of Incorporation and Place of BusinessProportion of\nOrdinary Shares\nHeld by REE\n\nREE Automotive UK Limited *United Kingdom100%\n\nREE Software UK Ltd.\nUnited Kingdom100%\n\nREE Automotive USA Inc.United States100%\n\nREE Automotive GmbHGermany100%\n\nREE Automotive Japan K.K.Japan100%\n\n*On May 5, 2026, REE Automotive UK Limited commenced an administration process in the United Kingdom in connection with its corporate wind down. In connection therewith, REE established REE Software UK Ltd, a newly organized entity in the United Kingdom. For further information, see Item 5.A. under the section titled “United Kingdom Administration”.\n\nD. Property, plants, and equipment\n\nOur principal executive offices are located at Kibbutz Glil-Yam 4690500, Israel. Until April 7, 2026 we had fully occupied and utilized an office space totaling approximately 35,520 square feet (3,300 square meters), under a lease agreement that expires in the second half of 2026, with an option to extend the lease until 2031. On April 7, 2026, we entered into an agreement with our landlord to permit the use of approximately 11,840 square feet (1,100 meters) of this space by a third party in exchange for a monthly payment (including the associated monthly municipal taxes) by such party, which is expected to be paid directly to the Company’s landlord. Additionally, the third party is expected to reimburse the Company monthly for one-third of its average total monthly utility expense (e.g., water, electric). All other terms of the Company’s lease remain unchanged. As a result, the Company’s monthly lease payment is expected to be reduced to two-thirds of the\n\n75\n\n[Table of Contents](#ib754f8dbfd9a410ebea6292869b01926_7)\n\noriginal lease payment amount. Therefore, as of the date of this Annual Report, we are only utilizing approximately 23,681 square feet (2,200 square meters) of our principal executive office in Kibbutz Glil-Yam for our Company’s operations.\n\nIn addition, we have the following facilities that we consider to be material as well as certain immaterial facilities:\n\n1.Previously, REE had entered into a lease agreement for its UK Engineering Center and Launch Factory, which was located in Coventry, UK. The facility was approximately 130,000 square feet (approximately 12,077 square meters), under a lease agreement that expired in 2032. REE had utilized this facility for engineering, process validation activities, along with product assembly operations. In March 2026, REE, through its wholly-owned UK subsidiary (REE Automotive UK Limited), entered into an agreement with the landlord and a third-party assignee for the assignment of the lease agreement relating to such facility. As a result, effective March 10, 2026, REE no longer occupies such facility.\n\n2.REE operates a testing facility in MIRA Technology Park in the UK for an approximately 4,693 square foot (436 square meters) facility. REE utilizes this facility for product engineering design, validation, verification and testing, as well as product homologation. REE’s lease for this facility may be terminated by either party upon three months’ notice.\n\n3.Previously, REE had entered into a lease agreement for its Austin, Texas facility in the U.S. The facility was approximately 118,132 square feet (10,975 square meters), under a lease agreement that expired in 2032. In 2025 and 2024, we partially subleased this facility to third parties, which was terminated in the end of 2025. REE has not utilized this facility in 2026 and the landlord retook possession of the property. On May 8, 2026, REE, through its wholly-owned U.S. subsidiary (REE Automotive USA Inc.) entered into an agreement with its landlord to terminate its lease and the obligations therein. As a result, effective May 8, 2026, REE no longer occupies such facility. See also note 20 to our financial statements.\n\nAside from our own facilities, in 2024, we had entered into an agreement with Roush to serve as our contract manufacturer for the assembly and integration of our vehicles. Prior to our production pause, such activities were conducted at Roush’s Southeast, Michigan facility with approximately 47,200 square feet (approximately 4,385 square meters) of dedicated space. Following our production pause, we are no longer using these facilities and the agreement was terminated during 2025.\n\nUnless otherwise stated, all our facilities are utilized. We believe that our offices and facilities are adequate for our current needs."}