By Akash Sriram
(Reuters) – Israeli startup REE Automotive said on Tuesday it expects revenue of up to $770 million by 2030 from a licensing deal with an undisclosed company to which it will provide technology that helps make autonomous vehicles.
REE, whose customers include van rental firm U-Haul and French planemaker Airbus, said it has signed a preliminary deal with the unnamed company and expects to finalize a definitive agreement soon.
The Israel-based company has avoided the costly manufacturing investments that have hobbled several electric-vehicle startups and instead staked its future on licensing its technology. The deal could also help the startup become profitable as volume grows.
The startup’s technology allows vehicles to be software-defined, in which most features and functions — performance, safety and entertainment — are controlled mainly through software while simplifying wiring by grouping functions into zones, making it easier to integrate self-driving capabilities.
It expects to start generating revenue for software and services as part of the deal in the second half of the year. REE had order backlogs worth $150 million and the agreement would take that figure close to a billion, it said.
“We can break even on the bill of materials level in the lower hundreds and we expect to break even at the EBITDA level in the low thousands. I think this gets us there,” REE CEO Daniel Barel told Reuters.
“The more we shift from manufacturing of vehicles to software and services revenue, naturally, margins will be of software companies.”
The company said its unnamed customer, which develops mobility solutions, will license the technology to produce thousands of self-driving passenger vehicles starting from 2027.
(Reporting by Akash Sriram in Bengaluru; Editing by Krishna Chandra Eluri)
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