Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 14

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 14
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 portfolio and brand. REE has incurred, and expects to continue to incur, significant expenses that have and will impact its profitability, including research and development expenses, sales and distribution expenses as REE builds its brand and markets its products, and general and administrative expenses as it scales its operations. REE’s ability to become profitable in the future will not only depend on its ability to successfully sell its products, but also to control its costs. If REE is unable to accomplish any of the following then we may not be able to achieve profitable operations: efficiently design, source parts, assemble, sell and distribute its products. Moreover, because various items in our supply chain are, and may continue to be, subject to tariffs, we have experienced significant increases in our vehicle production. As a result, we have had to delay our vehicle production and expect such tariffs (including the surrounding uncertainty therefrom) to continue to significantly impact our business, operations, and vehicle production goals. If we return to production of our vehicles and are unable to pass the costs of such tariffs on to our customer/end-user base or otherwise mitigate such costs, or if demand for our vehicles decreases due to the higher cost, our results of operations and overall financial performance could be materially adversely affected. Moreover, on September 15, 2024, we entered into a Supply Chain Management Services Agreement with Samvardhana Motherson International Limited, or Motherson, which among other items, includes services to optimize our supply chain for cost efficiencies, supplier development and management, part development cost management, contract and purchase order management, and supply chain management. Motherson’s inability to optimize and manage our supply chain may result in operational inefficiencies and higher costs (including with respect to sourcing parts) across our supply chain, which would impact our ability to achieve profitability. Additionally, since entering into the above agreement, Motherson has assumed managerial responsibility over a significant number of our suppliers. In the event that Motherson is unable to continue to provide these services, we would need to manage and communicate with these suppliers ourselves. Doing so would likely add time, cost, and create resource constraints, including the reallocation of our employees from other efforts within our business, which could strain our current resources and/or create significant interruptions and inefficiencies within our supply chain. Such circumstances would likely have a material adverse affect on our operations and business.

Table of C ontents

In addition, over 2023 and 2024, we took steps to lower our expenses. Specifically, in 202