REE Automotive Ltd. (REE) Q2 2022 Earnings Report, Transcript and Summary

Greetings, and welcome to the REE Automotive Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Limor Gruber, Vice President of Investor Relations. Thank you. You may begin.

Thank you, operator, and thank you all for joining our second quarter 2022 conference call. We hope that you have seen our press release and investor presentation issued earlier this morning at investors.ree.auto. We will be referring to the presentation during the webcast today. I would like to remind you that today's call may include forward-looking statements. Any statements describing our beliefs, goals, plans, strategies, expectations, projections, forecasts and assumptions are forward-looking statements. Please note that the company's actual results may be different from other anticipated by such forward-looking statements for a variety of reasons, many of which are beyond our control. Please refer to the company's Form 20-F filed on March 28, 2022, with the Securities and Exchange Commission, which identifies the principal risks and uncertainties that could affect our business, prospects and future results. We assume no obligation to update publicly any forward-looking statements, except as required by law. In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, non-GAAP net loss and non-GAAP EPS. Please see our earnings release for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures. Joining me today is our Co-Founder and CEO, Daniel Barel, who will provide an overview of our business; Josh Tech, our COO, will then provide you with an operations update; our CFO, David Goldberg, will continue with a discussion on our financial results and outlook. After that, we will open up the call for Q&A. At this point, I will turn the call over to Daniel. Daniel, please.

Thank you, Limor. Good morning, and welcome to our Second Quarter 2022 Earnings Call. I will begin the call by providing you with an update on the progress we are making towards commercialization of 2 separate P7 products as we focus on converting our pipeline into backlog. Moving to Slide 4. I would like to begin by saying that we had a strong second quarter during which we continue to execute our business plan in a disciplined manner. REE had 2 main goals for the quarter. The first was to receive customer input on the P7 product line. The feedback we have received from leading commercial fleet operators and owners in North America and Europe has been very positive. As customer evaluation progress, we are seeing strong interest in electric vehicle powered by REE, and we expect to receive firm orders in the next few months and to start delivering test fleet to our customers. Delivering test fleet to customers is a critical milestones on the path to scale adaptation of Powered by REE vehicles. Commercial owners and operators are highly sensitive to vehicle uptime, durability and efficiency. Introducing new vehicles into fleet must make sense from a business and operational perspective. And the only way to reach scale adoption of the new vehicle is by introducing a test fleet and having this test fleet operate as well or better than current options. This is the path to firm follow-on orders in significant quantities. We will only announce firm orders going forward. In addition to pounding the ground and deploying test fleet Powered by REE, regulatory tailwinds such as the recent Inflation Reduction Act are supporting the shift of major commercial fleets to electric vehicles. We are actively assessing the potential benefit of the IRA to our business. The second goal was to continue the development of our production capacity. We have made great strides in building out our initial integration center. As Josh will describe shortly, as we progress towards initial capacity of 10,000 vehicle sets this year, the launch of our second integration center is also progressing. When complete, this facility will double our production capacity to 20,000 vehicle sets annually. Development of both integration centers are on track and on budget. Moving to Slide 5. As you may recall, our P7 platform, which we revealed at the beginning of this year, is a modular platform designed to accommodate commercial vehicles from Class 3 to 5. Since that reveal, we have debuted 2 full vehicles, both powered by our P7 platform. As many of our listeners today are aware, we hosted an investor event 2 weeks ago, during which we showcased the Proxima Powered by REE, a classified walking band and the industry's first fully by wire commercial vehicle. This event followed a series of evaluations by prospective fleet customers with leading positions across delivery, logistics and retail segments. In addition, we have been testing and showcasing the P7-B, a Class 3 box truck, at our U.K. engineering center for several months now. For those of you who might have missed it, recent announcement and the investor event, I'll take a moment to describe some of those 2 EVs benefits. On Slide 6, Proxima, Powered by REE is the most advanced working van in existence. The body is designed by EAVX and built by Morgan Olson, both subsidiaries of JB Poindexter, a company with significant market share and a multi-decade track record in upfitting commercial vehicles. REE, the manufacturer of record, provides the backbone of the vehicle. The technical benefits of our chassis coupled with the commercial domain expertise and state-of-the-art body by Morgan Olson, deliver what customers and their drivers are looking for efficient and durable electrified vehicle that can be optimized for specific use cases resulting in attractive economies. Proxima Powered by REE has many technical attributes that provide real-world benefits to fleet owners. During evaluations, we heard from potential customers that they appreciate this game-changing advantage that include enhancement of mobility and safety with all-wheel steer and all-wheel drive, low stepping high for efficient delivery cycle times and agronomics that reduce driver distraction, providing fleet efficiencies and driver wins. Proxima Powered by REE has many other amazing features, and I encourage you to watch the replay of the investor event on our website if you have not done so. Moving to Slide 7. On the back of the customer evaluation of Proxima Powered by REE, we expect to receive firm orders for test fleet from multiple customers and we look forward to sharing more with you soon. These test fleets will be used for real-world evaluation by our customers. Some of our prospective customers have very large fleet that will not be electrified all at once and without significant testing. We believe orders for test fleets will mark the beginning of multiple long-term relationships, and that REE will receive larger orders after customers collect validating data and positive driver feedback. We're obviously not the only company competing in this area. But we believe our product is the best-in-class, and that our go-to-market partnership for the Proxima body and the P7 chassis is a real competitive advantage. Proxima powered by REE went from concept to product design from the ground up in just 1 year, a very short time by industry vehicle development started. I am very proud of both our teams for their accomplishments and for our joint commitment to electrification and carbon neutrality. Moving to Slide 8. The second vehicle we unveiled, the P7-B has undergone month of positive and encouraging customer evaluation at our engineering center in the U.K. and is on track for 2023 production. The P7 is built on a Class 3 P7 chassis, the same platform underlying Proxima Powered by REE. That means it delivers many of the same fleet and driver benefits, which we believe will deliver lower TCO, total cost of ownership. The P7-B is targeted at the important and growing mid- and last-mile delivery segment. The on-track testing of the P7-B, an extensive potential customer evaluation, is a crucial step on the road to commercialization. Feedback from prospective customers has been that this is the truck they have been looking for, one that drives like a sedan, that is built to deliver under the harshest commercial duty cycle. They also appreciate the flexibility of the P7 as it can be configured to best suit customer needs. We expect real-world trials with customers to commence next year. Moving to Slide 9. As we have demonstrated, because of its modularity, we are able to quickly deploy our technology for a variety of applications. This allows us to access distinct go-to-market channels, including designing and building our own vehicles for direct sales to fleet customers as in the case of the P7-B and through partnerships with upfitters. As we shared before, REE is the manufacturer of record for Proxima and P7-B, making us responsible for the homologation and certification of the electric platform. The homologation and certification activities are progressing on track at both the component and system level. Additionally, core control systems, software and functionality, safety development, key elements of the development of mission-specific variation enabled by REEcorners are progressing according to plan. While our main focus is commercialization of P7, we have other projects in various stages of development, and we will share updates about this as appropriate. With this, I would like to pass it on to Josh for an update on our operational progress. Josh?

Thank you, Daniel, and good morning. While I met many of you at our recent IR event, this is my first earnings call at REE. I'm very happy to be here today and share with you some updates on our operational progress. Moving to Slide 11. We remain on schedule with commercialization both operationally and financially. Operationally, our core U.K. engineering team is now substantially built out. All key engineering functions are now in-house and process management and infrastructure is in place. Our engineering test fleet in the U.K. is accumulating durability miles, progressing through verification and validation activities in preparation for production of design intent builds later in the fourth quarter. We are on track to hit the production capacity targets we have previously communicated. Our first assembly line will soon be installed in our Coventry, U.K. integration center, which is our launch factory and blueprint for all future integration centers. It is expected to have a capacity of 10,000 vehicle sets by the end of this year. The Austin, Texas integration center is also underway with the shell of being stood up and complete. I would add that our first integration center is nearly complete, and we have the ability to accelerate the development of our second integration center, if needed, by replicating the template of the first integration center. Moving to Slide 12. Now I would like to give you more color on our integration centers, which will use robotic assembly cells, underline electrical tests and auto boxing stations. An assembly cell is an alternate strategy used in manufacturing that can provide much greater flexibility and scalability than a traditional production line. These cells will make up our REEcorners production lines where automated guided vehicles will move the work in process product between stations for both automated and manual assembly as well as double assemblies to the lines. There are several advantages to this approach. First, it provides the ability to validate all assembly cells quickly by testing and optimizing 1 cell and then implementing those best practices across all others, which will reduce the time to design and develop additional assembly lines. Second, the module production line is also highly automated and flexible, meaning that we can scale for dam depending on future variance and demand. Finally, assembly cells and production lines can be officially lifted and installed at future integration centers as well as we apply one global standard using the plug-and-play format. We are working with top supply partners on the assembly line and line of sight controls. This allows us to use cloud-based solutions, giving us complete visibility into all production operations and enabling us to scale manufacturing, both locally and globally across all integration centers. These integration centers will be linked to our control center, where we can achieve an overarching view and build perspective along with full traceability of our REE solutions. With that, I'll hand over to David Goldberg, REE's CFO, to discuss our financial results. David?

Thank you, Josh, and good morning. Before opening the call to Q&A, I'd like to discuss the company's results for the second quarter, then reiterate our expectations for 2022. The company reported a GAAP net loss of $25.2 million in the second quarter of 2022 compared to a net loss of $21.5 million in the first quarter. The increase is mainly related to lower income from warrants remeasurement, partially offset by lower operating expenses. The non-GAAP net loss of $21.3 million in the second quarter of 2022 decreased compared to $28.3 million in the first quarter of 2022, primarily due to the timing of expense recognition related to development and production capacity costs. We remain on track to meet our guidance for cash spending in 2022 at a range of $130 million to $150 million, inclusive of both capital and operating expenses. This range is presented on a cash basis and is tied to the execution of our business plan. Accordingly, expenses are dependent in part on the timing and achievement of certain milestones related to the company's commercial programs and projects and may not be linear throughout the year. Our operating expenses are mostly comprised of technical and engineering spend required to execute according to the time lines we've communicated. It is important to note that we expect engineering expenses tied to P7 to peak this year. Our budget includes investments of approximately $30 million in 2022. These investments are mainly related to establishing our integration centers. This portion of the budget is effectively committed and will continue to be incurred through the second half of 2022. I note that some of the expenses related to the establishment of initial production capacity may not be capitalized and will be recorded as operating expenses. As of June 30, we had approximately $207 million of liquidity comprised of cash and short-term investments and no debt. We continue to have sufficient funding to execute the programs that Daniel described, and to advance other commercial activities. As you may have seen earlier today, the company filed a shelf registration statement. We intend to allocate up to $75 million of the shelf registration to the sale of REE's Class A ordinary shares in an at-the-market program once the registration statement is declared effective. The registration statement has not yet been declared effective and no sales may be offered or sold under the shelf registration until it becomes effective. We do you not currently plan to issue shares under the program. As a reminder, we have a CapEx-light business model. Because of this model, each of our integration centers require capital and tens of millions of dollars, significantly less than the hundreds of millions or billions of dollars required to build a large factory typical of other OEMs. We remain focused on executing our business plan. While we believe a significant opportunity exists beyond P7, the vast majority of our budget has been allocated towards execution and commercialization of this platform in the U.S. and Europe. The cadence of our spending will be indicative of our progress, and we will continue to update our shareholders on budget expectations as the year unfolds. With that, we would like to open the call for questions. Operator?

[Operator Instructions] And the first question comes from the line of Michael Shlisky from D.A. Davidson & Company.

I wanted to touch quickly first on the P7-B. I guess a couple of questions there because this seems somewhat different than what was communicated in the past as far as the method at which we'll be approaching the market. Do you have to basically create an internal sales force to sell this vehicle? And is your intention instead to get dealerships or to use someone like an EAVX to be the kind of point of sale to the customer? Just a sense of how you're going to actually truly go to market with this vehicle?

Yes, absolutely. Thanks for the questions. It's an important one. We've always said that we are first to money. And we've always said that we have direct approach to go to the market by ourselves. However, the approach is dependent on the structure of the market in different classes. So when you look at Class 5 and when you look at walk-in van, it is customary for the chassis to be purchased separately from the body and of course, for the upfitters and the chassis builders to work together to supply a full vehicle to the fleet. But -- sorry, not about that but this is the way it works traditionally. And this is how we work with EAVX and Morgan Olson, which is -- which are a great, great partners with a great track record. However, when you look at, for example, Class 3s and you look at cab chassis and box truck, it is customary that the manufacturer of record in that example as to manufacture the entire cab chassis and sell it directly to the fleets on which they will later on put on a box, which they will purchase from any box manufacturer as such, for example, Morgan and others. So there's not been any change in our strategy, just different vehicle categories.

Okay. Can you maybe discuss the margin profile differences between the P7-B and the Proxima Class 5? Do you anticipate a different cash cadence from each of these 2?

Sorry, when you say -- I mean, on margin, I think the margin profile or at least the economics are going to be similar across both vehicles. .

Okay. All right. A question I've gotten recently was just some thoughts as to how the Proxima event went a few weeks ago from a fleet or a dealer perspective, those who were testing from the industry? You've mentioned that you had mostly positive feedback there, but were there any learnings you got from there that are going to have you going back to the drawing board to redo parts of the vehicle? Or do most people think that the vehicle as presented was going to generally meet their needs?

Yes. The event that we've had with the Proxima, of course, it was really exciting and we have really strong feedback from. But to many of those customers and leading fleets that attended, it was not entirely new because they were part of that development cycle and they were part of that design. And we've been listening to the voice of the customer from them for a very long period of time. And we've implemented significant inputs for them. So I'm very happy today and also been there to hear their feedback that this was the truck that they've been looking for. Naturally, there's always feedback for things that they would love to improve on many fronts from interior alignment of screens to others, right? But in general, I think that we are very, very encouraged by the feedback that we've got and by the level of acceptance we've seen from those fleets.

Okay. Maybe one last one for me about pricing for the P5 Proxima. The feedback having hearing from some people who drove the vehicle where this is a great vehicle, but what's going to cost me? And I don't know if you can give us a pinpoint number for what you think that truck is going to sell for? Or maybe at least some sense as to the percentage increase above the comparable vehicle would be appreciated.

Sure. So naturally, since we are little in the midst of negotiating with quite a few fleets. I would not go into the economics of everything here. But having said that, I think we have a very appealing offering and very competitive market positioning on the – on both vehicles, actually. Remember that we are able to cost – we are able to price current costs as we’re moving to the market. And it allows us to see a very good path to attractive economics. And one of the reasons that we’re able to be that attractive is because of the CapEx side model that helps us to reduce significant costs that are inherent in traditional OEM other than us, of course. And I think we’ve also received very strong positive feedback on initial pricing and long-term pricing of both P7-B and Proxima.

And the next question comes from the line of Andres Sheppard from Cantor Fitzgerald.

Congrats on the quarter. David, maybe one for you. Can you give us just a little more details on the shelf registration that was filed? I see that there's no intention to issue shares under the ATM facility. I'm just wondering maybe give us some details, obviously, this is a tough environment to raise additional capital, and so I guess, just how do you plan on using this? And then any timing that you could provide around that? .

Yes, happy to. So really, the shelf and the ATM is good housekeeping. We've been a public company now for just over a year. As we said in the release or in the script, no intention to use the ATM today. And I'll remind you that from a P7 perspective, we're fully funded. .

Got it. Okay. That's helpful. And maybe as a follow-up, with the integration centers becoming operational, first in the U.K. and then the one in the U.S. next year, are there any risks to the 10,000 platforms per year capacity just given the continued supply chain disruptions? I'm wondering if you see any potential hiccups there?

No, actually. We are on track with everything coming online, and we don't expect any hiccups to get to 10,000 vehicle sets by the end of the year and double that next year. We reaffirm the -- everything we said on production.

Wonderful. Okay. Congrats again on the quarter.

We will now take the next question. And it comes from the line of Tyler DiMatteo of BTIG.

So I just have a bigger picture of a macro question here. So we have this two-pronged approach, right, where we're supplying the chassis to Morgan Olson, and then we have the P7, which is our own integrated vehicle. Can you just kind of compare and contrast those strategies? And how you see them really evolving and working together over the next couple of years? Trying to get a sense of what that really is going to look like?

Sure. Let me try to answer that. In general, we're targeting the 2 largest segments in commercial vehicles, right, Class 3 and Class 5. The difference in those vehicles is quite major because they're not only bill differently, they serve different needs. And some of our customers might have a mix of them, but they're using it differently. And I think looking at it in a holistic way and the more macro way is the right way to look at it in a sense that there is a path to bring a product to the market. So we've talked about the event in Detroit a couple of weeks ago and where we've done customers demos with leading fleet that have been very positive, right? And those customers are spending time and money on testing our vehicles. And some of them, as some of you saw, actually shared publicly what they think about those trials and the relationships. And we've been working with them for a while. Now as I mentioned earlier, some of those fleets and other companies and owners have been part of the development and design stages, which is very important when you create a brand-new vehicle, taking their needs and voice of the customer. And I think this is one of the key factors that we've managed to get that positive reactions from the event. Now the next phase in bringing products to the market, in most cases, after that demos is deploying test fleets. And since we're working with literally the largest fleets in North America and Europe, the timing of the testing phase is customer dependent. However, once testing phase is complete, we will become an approved supplier and participate in the electrification of their fleet and benefit from significant recurring revenue. And this is relevant for both Proxima and P7. Now if you look at Class 3 and Class 5, we see around 750,000 commercial trucks in Class 3 and 5 that are relevant for P7, and they all need to electrify. And although we're not the only ones in this race, from speaking to customers, there is a lot of white space. So I think the path that we're laying towards getting those, both Proxima Powered by REE and P7-B, to market and to customers is really, I mean, detailed and straightforward.

Okay. Great. And Daniel, just one follow-up. When you say the 750,000 for Class 3 and 5, that's Europe and North America, correct? .

Yes, correct.

Okay. Perfect. And if I could just get one more in here. So -- and this may be a question for Josh. As we think about the integration centers coming online, I know you said in the past, it's kind of a template model once one is up and running and you work out the kinks. But I'm trying to get a sense of just how more quickly can we accelerate the development of one of these facilities and kind of get it up and running in terms of bringing capacity online?

Yes, it’s a good question. So realistically, we say sub 12 months, 10 to 12 months, we can do it. The real advantage is not only because the robotic cells that we have done are constantly being updated and changed from lessons learned basically, it becomes for us almost an off-the-shelf product because we validated it, and we just order more and scale those accordingly. But the more important part is because we have the CapEx-light model, the equipment itself in terms of its industrialized equipment, of course, robots and all the safety guarding and things like that, but it’s not large equipment like presses and things like that where we have to do custom infrastructure. For example, we don’t have to do pits or things like that on the floor. So we can use standard distribution-type buildings. So even if it’s – if there’s no brownfield space available, even a greenfield tilt up building can be done very quickly, right? So it’s like as you can see, we’re doing in Austin, the building is already complete. So that whole advantage of keeping it CapEx light, not only helps with the entire supply chain, but it also helps with the ability to bring up the infrastructure extremely quickly, if we need to.

We will now take the next question, and it comes from the line of Jeff Osborne from Cowen & Company.

Daniel, a couple of questions on my end. I was wondering if you could give us a perspective of how many test units for Class 3 and 5 you'll be producing in the second half of the year that people will be having out on the roads late this year and early next year?

Yes. We are currently running a fleet of P7-Bs, and we intend to deploy test fleet, I think in the next few months for our multiple customers. The -- each customer test fleet is naturally customer dependent. Some of them are larger than the others. And this is -- and the reason is that the idea is not to only test the vehicle itself, but actually how vehicles Powered by REE fit into the fleet itself, fit into the infrastructure. What's the feedback from drivers on day-to-day routines, et cetera, and the size of those fleets is mainly customer dependent. The goal for each of those fleets, however, is the same, which is proving the advantages and capabilities of those vehicles in order to allow for scale adaptation at all.

That makes sense. Just in perspective, in aggregate, would you say that's maybe 20, 30 vehicles in total? Or are we talking single digits? Is there any perspective you can put in just total, not on a per fleet basis?

We have the capacity to manufacture more than that. It's a matter of the acceptance level of the fleet. So in terms of capacity, we can do 100 and more. The important part is how many a fleet can absorb. Keep in mind that it's not just -- the reason I'm saying is it's not just the vehicle that matters, right, somebody needs to put in substractor to charge it, to maintain it, et cetera. It's more than just providing the vehicles and then having the seat idle without use, which, of course, is the sense of doing so. So it's more of how fast we can set up those test leads with customers that they actually can put drivers in it and actually deliver and go out there and do the work and generate revenue for them and then they can see how well they behave.

Got it. And then for David, I just wanted to -- maybe a multipart question on the cash. So I get it that P7 is fully funded and that spending peaks this year. Without getting the specifics on a monthly burn rate, can you give us a sense of which quarter or have we already reached the peak of development expenses for P7? It sort of gets back to the question I was trying to ask Daniel if you're going to see a bunch of capital in the developing 40, 50, 100 vehicles to be tested without revenue. I'm just trying to get a sense of what the cadence is of OpEx and CapEx for the second half of the year.

Got it. So a, right, we remain disciplined. And so when you think about the guidance that we gave to the market earlier this year, we're still very much on track in that regard, and that includes the testing activities that Daniel mentioned. I don't think we're giving quarterly guidance. I think this -- I mean, again, I think we're just really on track for that total number for the end of the year. I think that's the best way to answer the question. .

The next question comes from the line of Colin Langan from Wells Fargo.

Just following up on the last question. So the full year guidance, I think, it's $130 million to $150 million. I believe you're trending below that, I think it's like $55 million year-to-date. So that would imply, though, a step up in the second half? And what would be driving that? Is that the more prototypes are expected? .

Yes. Okay. So there would be -- I mean, it does -- yes, the math does imply a bit of a step up. But again, I think I want to stress that we're very much on track. So it's going to be -- again, we're not giving specific guidance within the range, but I would say, closer to the midpoint. And then, yes, like if you think about it, we've already started some of the spending to build the test fleets that hasn't hit the P&L, but some of the cash has already gone out the door. And then also remember that as we're engaging with customers, some of those test people will actually generate revenue as well. .

Okay. And how should we think about it? You just demoed the vehicles, so you should get in the next 3 months or so orders for prototypes for test fleets. And then in 6 months, we would get like firm orders. Would that be the sort of cadence we should be expecting in terms of how this would come in? .

Yes. I mean roughly, it sounds reasonable that -- it's -- the idea is this, right, there's been very positive reactions. Some of you have been there and seen some. There's been very positive reaction for customers and fleet. Now what we need to do is negotiate commercial agreements and deploy test fleets. And like David said, we expect to generate revenue from those test rates because it's part of the adaptation of commercial vehicle, right? We don't do it for free. Having said that, I think what's important to emphasize, and I think I said it on the Investor Day and also and we reiterate that on the PR, we intend to announce only firm orders. We've done this before and looking forward as well. So basically, orders that we intend to manufacture in the foreseen or short future, immediate future and not general concrete -- or general plans that might not be firm. So I think the cadence is very straightforward. We negotiate terms, we deploy test fleets, those fleets test those vehicles for different durations of time depends on who they are. Some test them for a few weeks, some test them for a few months. And then we move on to adaptation, right, and become an approved supplier and general recurring revenue from recurring purchase holders.

And when you said you announced firm orders, that would include like a order for prototypes and test fleet, right? Or...

Yes. Orders mean things that we've been paid for and we go and produce. Not.

And you mentioned you need -- it's not only buying the vans, it's also you need to actually set up the infrastructure. So who actually would take care of putting in the charging stations? And then have you announced the partners to do the servicing once these vehicles are in operation? .

Yes, that's a really good question. So thanks for it. Unfortunately, it depends on the customer. So for some of the customers, we provide a full turnkey solution. We can provide everything from charging. Also, we have partners for financing for that charging infrastructure and so on and so forth. And of course, vehicles and nationwide service locations and so on so forth. For other fleets or other customers, they like to do everything in-house themselves. So they have their own suppliers for charging infrastructure maintenance, where we will give them the training and, of course, corners at spare part, but they will do the maintenance for themselves. So we are able to provide both, and we've seen a mix -- a healthy mix of some at one way and some that one down this.

And the partner, are you going to build servicing stations? Or you have a strategic partner that would take care of that for you?

We have partnered with a few household names that have given us access to thousands of service locations across Europe and the U.S.

There are no more questions at this time. I would like to hand back over to management for final remarks.

Great. So thank you all for joining us today. We’re always available to answer any questions you might have. And we’ll keep you posted of events when you can experience our game-changing vehicles for yourselves. Lastly, I would like to take this opportunity and thank team REE for dedication and focused execution, which allows us to keep meeting our targets even in the current volatile macro environment as we advance forward and more sustainable carbon-neutral world, including a fully electric vehicle future. Thank you all so much.

That does conclude our conference for today. Thank you for participating. You may all disconnect.