Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 108

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 108
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  Total                            $                           48,506      $                     30,658      $              11,111      6,737  

Purchase obligations. The amounts listed for purchase obligations in the table above represent agreements (including open purchase orders to purchase inventory) to purchase products and for other expenditures in the ordinary course of business that are enforceable and legally binding and that specify all significant terms.

Open purchase orders that are cancellable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above. Such purchase orders often represent authorizations to purchase rather than binding agreements.

In addition, we entered into agreements in the normal course of business with vendors to perform various services, which are generally cancellable upon written notice. These payments are not included in this table of contractual obligations.

C. Research and development, patents and licenses, etc.

We have invested significant time and expense into research and development with respect to our products. Our research and development activities are primarily located in Israel and at our UK Engineering Center. Our ability to obtain a leadership position in the automotive industry depends in part on our ongoing research and development activities. Our research and development team includes engineers and researchers with a diverse range of expertise, levels of experience, and academic backgrounds. We have a strong combination of engineers with automotive and technology industry experience from Israel, the UK, Germany and the U. S. who together combine innovative thinking with a common goal of developing a superior SDV product for the automotive market. Our research and development department is comprised of approximately 160 employees and external consultants as of December 31, 2024. In 2024, research and development costs accounted for approximately 65% of our total operating expenses. As we move closer to mass production of our vehicles, we expect our expenses to shift more towards manufacturing and to depend less on research and development activities.

Israeli tax law allows, under certain conditions, a tax deduction for expenditures related to scientific research and development projects, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:

• the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;

• the research and development must be for the promotion of the company; and

• the research and development is carried out by or on behalf of the company seeking such tax deduction.

The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. No