Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 96

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 96
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Cost of Revenues

Cost of revenues increased by $0.4 million, or 13%, from $3.3 million for the year ended December 31, 2023 to $3.7 million for the year ended December 31, 2024. This increase was primarily due to depreciation of our production machinery and equipment related to our UK Launch Factory as well as adjustments to write down the carrying value of inventory, which exceeded its estimated NRV as part of material purchasing for preparation to production of EVs. This was partially offset by the expensing of deferred expenses related to the strategic development agreement with a customer, which was terminated in 2023, as described above.

Research and Development Expenses, Net

R& D expenses decreased by $33.2 million, or 40%, from $82.7 million for the year ended December 31, 2023 to $49.5 million for the year ended December 31, 2024. This decrease was primarily due to a decrease in non-recurring engineering and materials expenses related to the development of P7 SDVs, a decreased share-based compensation expense of $4.2 million incurred during the year ended December 31, 2024 compared to $8.4 million incurred during the year ended December 31, 2023 as well as a decrease in payroll and related expenses related to a decrease in R& D employee headcount as a result of our realignment to our business plan and an increase in UK R& D tax credits and grants received from the UK government. Excluding share-based compensation expense, R& D expenses decreased by $29.0 million, or 39%, from $74.3 million for the year ended December 31, 2023 to $45.3 million for the year ended December 31, 2024.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses decreased by $9.4 million, or 26%, from $35.6 million for the year ended December 31, 2023 to $26.2 million for the year ended December 31, 2024. This decrease was primarily due to a decrease in professional fees, a decreased share-based compensation expense of $5.4 million incurred during the year ended December 31, 2024, compared to $7.9 million incurred during the year ended December 31, 2023, as well as a decrease in director and officers insurance expenses and lower payroll and related expenses related