With $5.1B In Signed Deals, Could This Be Next Great EV SPAC?

A new electric vehicle company is hitting the public markets as an SPAC deal brings REE Automotive public.

© Provided by Benzinga

The SPAC Deal: REE Automotive, a leader in eMobility, announced a SPAC deal with 10X Capital Venture Acquisition Corp (NASDAQ: VCVC) to go public.


Load Error

Long-term investors in REE Automotive include Koch Strategic Platforms, Mahindra & Mahindra, Mitsubishi, American Axle & Manufacturing (NYSE: AXL) and Magna International (NYSE: MGA).

The deal will give $500 million in gross proceeds to REE Automotive. The deal values REE Automotive at $3.1 billion.

Shareholders of 10X Capital Venture Acquisition Corp will own 5.6% of the company if the merger is approved.

About REE Automotive: REE Automotive offers a fully flat and modular platform for electric vehicles based on its proprietary REEcorner technology.

REE Automotive says it offers a low total cost of ownership for its customers. 

The company integrates components including steering, braking, suspension and powertrain control into the wheels on the REECorner platform.

REE Automotive has an agnostic approach focusing on who or what wins. The company offers battery and fuel cell solutions, autonomous and human driven vehicles and platforms for startups and incumbent providers.

Related Link: 10 SPACs Under $11 For Investors To Consider In 2021

Growth Ahead: REE Automotive is targeting a $700-billion total addressable market for Class 1 to Class 6 commercial automobiles.

The SPAC merger is expected to accelerate the company to mass production of its REECorner technology and platforms to begin in 2023.

REE Automotive has secured a global network of Tier 1 partners in over 30 countries. Customers include investors like Mitsubishi and also Hino Motors, the medium and heavy duty trucking arm of Toyota Motor (NYSE: TM).

The company’s order book has 260,000 units signed. Over 477,000 units are in the advanced pipeline stage and could be added to the order book.

Competition: REE Automotive has the largest total addressable market size of its peer group, as it offers three platforms instead of one or two from competitors. The company also can create platforms for Class 1 to Class 6, while competitors focus on one or two classes.

The competitors for REE Automotive named in the deal presentation are Arrival, which is going public with CIIG Merger (NASDAQ: CIIC); Rivian; Canoo (NASDAQ: GOEV); Fisker (NYSE: FSR); Nikola Corp (NASDAQ: NKLA); Hyliion Holdings (NYSE: HYLN); and Lordstown Motors Corp (NASDAQ: RIDE).

Financials: Revenue estimates call for $19.1 billion by fiscal 2026. The company has 27% of its expected revenue currently signed to deals. REE Automotive has $5.1 billion in signed deals and $14 billion in advanced pipeline stages.

REE Automotive expects to be profitable by fiscal 2024.

The SPAC deal values REE Automotive at 0.6x EV/fiscal 2025 estimated revenue and 3.5x EV/fiscal 2025 EBITDA estimates.

Price Action: Shares of 10X Capital Venture Acquisition are up 39.85% to $15.30. 

Continue Reading