REE Automotive Ltd. (NASDAQ:REE) Q3 2022 Earnings Call Transcript

Colin Langan: Just to circle back. I mean, can you provide any broad color on the size of these test fleet orders, are we talking dozens of vehicles, are we talking hundreds of vehicle? It’s just — I don’t really have any context there? And you also mentioned, I think over 20 customers have tested, I mean, any color though, in terms of how many have actually taken the test orders? Is that three or is that, or all 20 taken orders? Any sort of guideposts there we could sort of get?

Daniel Barel: Yes, sure. Good morning. I mean, on the order side, I think we want to be able to control the narrative on those announcements, with whom are exactly that and what is the size. I can say that it is a significant number, for both for us and even more importantly for those customers, that have been, that are ordering. So I think, we will be sharing far more news on that together with our customers and partners in the coming weeks.

Colin Langan: So what is significant? Is that hundreds then, is that hundreds of orders?

Daniel Barel: I mean, that would be a fair assessment. And again, we will.

Colin Langan: And what is the timeline between sort of these orders testing and actually getting firm orders? Is that going to be months? What are you expecting in terms of getting those to convert?

Daniel Barel: Convert to — I’m sorry, to scale orders you mean?

Colin Langan: They were test orders — yes to scale orders to real orders.

Daniel Barel: I think you need to look at it in a way that some are for test fleets, there are no test fleets and the conversion is based on the customers, right? Because some customers would want to test the vehicle for a few weeks and some would want to test it for more than that. And it depends on the customer themselves. So it’s a case by case and I think the moment they are satisfied and happy with the product we are nominated as an approved supplier and then orders start to flow. It’s honestly a straightforward process.

Colin Langan: Okay. So it’s not a — so it could be weeks, it could be much longer. Okay. And then when you’re ordering, is the price the same when you order a test fleet or is it sort of more deliverative cost so they could test it out or should we think about those as being maybe as profitable as your normal vehicles on at least a variable contribution basis?

Daniel Barel: Yes. Naturally it’s a little bit difficult to talk about pricing. Here we do want to be able to keep our negotiation chips with us. I would say that when you look at test fleets, there is an extra cost to the — and not €“ that does not include only the vehicle, but the team of product engineers that we deploy together with those test fleets to ensure the successful testing and validation of the product.

Colin Langan: I guess I’m saying from a customer’s perspective, do I get a discount when I buy a test or am I just kind of getting a sense of their commitment here financially?

Daniel Barel: No, I’m saying is it’s actually as a program a little be more expensive because you are not only paying for the vehicle itself, you’re paying for a supporting team.

Colin Langan: And they are paying for those supporting team?

Daniel Barel: Yes, of course.

Operator: There are no further questions on this phone at this time. I would like to hand back over to the speakers for final remarks.