Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 24

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 24
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Achieving design wins is not a guarantee of revenue, and our sales may not correlate with the achievement of additional design wins. In particular, contracts with OEM customers typically do not require them to purchase products in any certain quantity or at any certain price, and any potential sales could be less than forecasted if a vehicle model for which we achieve a design win is unsuccessful, including for reasons unrelated to our products, if an OEM decides to discontinue or reduce production of a vehicle model or of the use of our products in a vehicle model, or if we face downward pricing pressure.

Moreover, pricing estimates are made at the time of a request for quotation by an OEM, so that worsening market or other conditions between the time of a request for quotation and an order for our SDV products may require us to sell our products for a lower price than we initially expected. We may attempt to have OEMs commit to certain volumes on a quarterly or shorter basis, however there is no guarantee that OEMs will enter into definitive agreements in the first place and in particular, agreements that contain such conditions. We may also face pricing pressures from OEMs as a result of their restructuring, consolidation, and cost-cutting initiatives or as a result of increased competition. In addition, there may be step-downs in pricing over periods of production as volumes ramp up. If we are unable to generate sufficient cost savings or introduce products at higher price points to offset price reductions, then our business, results of operations, and financial condition would be adversely affected.

Furthermore, our products are technologically complex, incorporate many technological complexities, and are typically subject to significant testing, and OEMs generally must make significant commitments of resources to test and validate our

Table of C ontents

products before including them in any particular vehicle model. The integration cycles of our products with an OEM can take several years after a design win, depending on the OEM and how efficiently we can integrate our SDV products into their systems and vehicles. These integration cycles therefore may result in our investment of resources prior to realizing any revenue from a vehicle model, except with respect to NRE. An OEM may choose to cancel production of the vehicle model for which we achieved the design win or cancel or postpone the vehicle model. Our SDV products, in particular, control an entire vehicle’s functions including engine, transmission, safety, steering, navigation, acceleration, and braking and therefore must be integrated effectively with the vehicle developed by the OEM and we may be unable to achieve the requisite level of interoperability in a vehicle model