REE Automotive CEO on how the startup is ‘not competing but completing’ in the EV tech space

REE Automotive CEO Daniel Barel joins Yahoo Finance Live to discuss why the electric vehicle technology startup REE Automotive has agreed to go public through a merger with a blank-check company, in a deal that values the Israeli firm at around $3.6 billion, as well as his thoughts on the future of electric mobility.

Video Transcript

JULIE HYMAN: As you know by now, particularly if you have watched our program, the SPAC trend is hot, as is the electric-vehicle trend, and the two have been frequently coming together this year. One recent example is REE Automotive, which is a maker of platforms for electric vehicles, which has agreed to merge with 10X Capital Venture Acquisition Corp. This is going to provide $500 million in gross proceeds to REE Automotive. And the pro forma equity value of this deal, about $3.6 billion.

Daniel Barel is joining us now. He is the REE Automotive CEO. Thank you so much for joining us. So talk to me about where you fit in the electric-vehicle process, what you guys are making, and for whom you will be making it.

DANIEL BAREL: Sure. We fit in in a different environment than most where we are the only horizontal player on the market, which basically means that we can address the entire market based on our platform. Think about it as basically powered by REE. Like, I would say, most computers would be powered today or have Intel inside, our technology and our business model allows us to basically be the cornerstone in future electric mobility or automotive, if you'd like, where we provide platforms.

Those platforms are so modular. They're modular either on size or battery or driver, which basically makes them future proof. Regardless of where the industry will take them, it allows customers to build any kind of vehicles they want on top of it. They can be at any size, any shape, and any kind of power driving them. They can be autonomous, or they can be manually driven.

And we fit in something unique where we're not competing with anybody. We're actually completing. We're allowing either car manufacturers, a legacy one or new ones, mobility players, logistics companies, delivery companies, e-commerce companies to create mission-specific vehicles that are tailor made for exactly their needs in record times and a fraction of the traditional cost.

BRIAN SOZZI: Daniel, on June 6 last year you tweeted Elon Musk and asked him to adopt your technology. Have you talked to him about putting your platforms, your skateboard platforms onto his vehicles? Because I'm looking at these images here, it makes perfect sense to me, and I would think maybe Tesla's making cars wrong. I mean, they can more efficiently make cars using your platform.

DANIEL BAREL: Yeah, I mean, if you think about it, we're making cars the same way for the past century, right? Suspension is a hundred years old technology. Steering is 120. Braking of friction between two metals is how you used to stop horses and carriages, right? It's ancient.

And when we shift towards new mobility, it doesn't make any sense to build new mobility vehicles based upon century-old technology, and this is exactly where we come in because conceptually if you think about it, an electric vehicle today is basically an ICE vehicle, an internal combustion, petrol. But it's they just took the engine out and put an electric motor in. The rest remains the same.

And for us at REE, that doesn't make any sense because it provides so many limitations than advantages. Mainly, the inability to change the size or the shape of the vehicle. Any change in the vehicle dimensions would require a very high investment, hundreds of millions of dollars, if not billions, and about eight years in development, mainly due to the fact that there is a ripple effect because of the way we build vehicles today. And what we can do is provide a cornerstone for everybody else to use that and concentrate on their differentiation to the market.

MYLES UDLAND: You know, Daniel, looking at, you know, not just the video that we're showing on the side here but going through the investor presentation, it seems to me quite focused on these different commercial applications. Do you think that a customer would want to buy one of your vehicles eventually, or do you see the market such that there is so much opportunity in, you know, the shuttle space that you guys are talking about, last-mile delivery, that you're focused more on-- I mean, I guess technically I'm a customer. It might be B2C. But really it's kind of a B2B type application for this platform as you guys think about it.

DANIEL BAREL: That's a very good question. So it's conceptually-- if you think about it, if you are a true believer in shared mobility, then personal vehicles are decreasing, and the number of them will decrease over the years because we're going to share more and more and more vehicles, and I think we all share that vision. However, the commercial market and the mobility as a service market, right-- you have commercial vehicles, delivery vehicles, and the likes of those are growing exponentially, not only because of e-commerce, of course, and the exponential growth year over year but this market is a long-lasting, growing market, and this is the market we think that is going to be the backbone of society.

Now, we're not saying we're not going to come in later into the personal mobility or private vehicle market, but we believe the best place to start is in the commercial and mobility as a service.

JULIE HYMAN: Daniel, thanks for your time. Appreciate it. Daniel Barel is REE Automotive CEO. Thanks and hope to talk to you again soon. Appreciate it.

DANIEL BAREL: Thank you for having me.