Jeff Osborne: Got it. And then how should we think about — you mentioned adding capacity in Texas as capital permits. How should we think about sort of the cadence of production? Is it a bit more maybe front-end loaded in the spring, 1Q, 2Q and then 3Q is a bit of a transitional quarter as you move from Coventry to Texas and then you would hit the ground running, so to speak, exiting 4Q and into 2025? I know you’re not giving official guidance on how many units you expect to produce and sell. But just trying to understand the sort of slope of production through the year.
Daniel Barel: No, that’s really a great question. Josh?
Josh Tech: Yes, I’ll put some color. So maybe for this year, it’s a little — like I said, it’s a little too early to answer the question of how many we’ll deliver. But as we said in the shareholder, like the tooling and the investments for the REEcorners are being deployed which we said we will continue to build those in the U.K. We don’t want to over-invest and we don’t need to. So we have plenty of capacity there. And then we — again, we’ll bring the remaining tooling online for the rest of the vehicle and scale up the production up to low hundreds of the vehicles in the U.S. by the end ’24. But again, the plan is linked to us completing the working capital needs, right? We’re not going to spend too soon. So we want to make sure things are tied perfectly together.
Daniel Barel: Yes. So basically, Jeff, we will continue delivering strategic quantities to our dealer to the demo program from the U.K. at full vehicles as we’ve started to do earlier this year, right, we already delivered a few trucks to customers this year, one of which people got to see in NTEA, Indianapolis and others are on the way. And the reason we’re using that approach — sorry and then, of course, once tooling comes online and the contract manufacturer is up and running, we’ll move to the U.S. for full assembly production and continue the production with the corners from the U.K. But the reason we’re doing this and the reason for the demo program through the dealers is that our dealers provide us with a flywheel effect, right?
These dealers have a large geographic footprint and long-standing and charter relations with multiple fleets in their service area. Some of those relationships are decades old, right? And each vehicle we deliver will be demonstrated to multiple fleets. Now we believe speaking to our dealers and to those fleets and others that this will result in follow-on scale orders. So the idea is that we want to start this process early or we have started this process early not waiting for the serial production to come online later in the year and we will be producing strategic amount of vehicles out of the U.K. until that comes online.
Jeff Osborne: Makes sense. If I could squeeze in 2 quick ones here. Should we think about the quarterly expense rate, so not the CapEx but the operating expenses, should that stay about the same as the current level throughout 2024? And then Daniel, if you could just make any brief comments on the readiness of your financing and charging partners that you’ve laid out to meet the demand exiting 2024 and into 2025?
Daniel Barel: Yes. Maybe we’ll start with the first financial bit. Yaron, you should take it.
Yaron Zaltsman: Yes, sure. Good morning. So I think going forward for year 2024 we should keep seeing actually decrease in our cost. What we are planning to do in year 2024 is to continue on the path that we started in year 2023, where it’s including decreasing in our operational costs. In year 2023, we decreased our cost by roughly 25% compared to year 2022. And going forward, this process should continue also. And I think we’ll also have another decrease of roughly 25% in our burn rate in year 2024.
Jeff Osborne: That’s a burn with the CapEx and the OpEx combined.
Yaron Zaltsman: Yes, that is correct. That is correct. So I think roughly we’re thinking about $5 million to $6 million per month in average. It will not be splitted on the same rate over the quarters. Because in H1, probably we’ll spend more as we need to complete the tooling and NRE expenses. And then going to the second half of the year, it will go down dramatically.
Jeff Osborne: Got it. Any brief thoughts on the charging and financing partners you have, Daniel?
Daniel Barel: Yes. So on the charging front, we’re working with several charging partners, one of which is, of course, Hitachi, Hitachi Power, that have very interesting and very compelling offering of large-scale, commercial-grade charging infrastructure. I think recently, they’ve announced something around that with Penske which is interesting to look at. And we work with others because some are asking for other solutions, more local solutions. And also on the upfit, it’s super important, right? I mean, we showed how we work with Knapheide. And of course, you’ll see other upfitters that we work with. Knapheide was very happy, of course, with the process, mentioning that we’re able to complete the marriage of the chassis and the body within less than 3 days which is a record for them, because of the ease of design for REE.
The one thing may be important to know here, Jeff, is we build to order, we don’t build for inventory. Therefore, we make sure that when we start building for a customer, we make sure that they have the upfit ready, the infrastructure, the chargers ready, everything ready to receive the vehicle. And I think this is key for us because we’re not building for inventory and therefore, we don’t get stuck with inventory or with postponed pickups. We deliver only to order. And we make sure that for all of our partners, they have everything they need in advance of us delivering the trucks, so the truck arrives complete and directly goes into service. And we will continue to be very prudent on that approach.
