REE Automotive cutting 50% of staff after $70M loss
The electric vehicle company restructures in a desperate bid to stay afloat after valuation falls from $3 billion four years ago to just $23 million.
Another of the once-cheerful 2021 SPAC offerings is now plunging into an ever-deepeing crisis. Following disappointing financial results that included a $70 million annual loss and a “going concern” warning, Calcalist has learned that electric vehicle company REE Automotive is initiating deep cost-cutting measures. The company plans to lay off 50% of its workforce by the end of the year in an effort to reduce operating expenses by 60%. Its management structure will also be reorganized and downsized.
REE, which is developing a modular electric vehicle platform, currently employs around 300 people. After already cutting 11% of its workforce in 2023, the new wave of layoffs is expected to affect more than 100 employees, not all of whom are based in Israel. The company also has operations in the U.S. and the U.K.
REE Automotive was founded in 2011 by Daniel Barel, Gilad Wolf, and Ahishay Sardes. In 2021, it went public on Wall Street via a SPAC merger at a valuation of $3 billion. However, it has since generated little to no revenue and posted heavy losses, and its market value has collapsed to just $23 million.
In response, REE stated: "The company believes the new plan will allow it to continue operating with a lean and efficient organizational structure, in order to bring Israeli technology to vehicles around the world. Our goal is to keep executing our business plan and maintain operations for more than 12 months."
REE Automotive began its journey not as a carmaker but as a wheel technology company under the name SoftWheel. Originally developed to assist people with mobility impairments, Softwheel's innovation was to place key vehicle components, such as the engine and suspension, inside the wheel itself. This design freed up space in the vehicle and opened the door to new engineering possibilities.
In 2019, the company rebranded as REE, shifting its focus to electric vehicle platforms. Rather than building entire cars, REE designs a modular “skateboard” platform that integrates the drivetrain, wheels, and chassis, a base that automakers can customize with their own upper vehicle designs. The key benefit, particularly for commercial vehicles, is space: by embedding the motor in the wheels, REE’s platform allows more room for cargo.
Between 2020 and 2021, REE attracted considerable attention. Japanese auto parts giant KYB (part of Kia), Indian automaker Mahindra, and Mitsubishi Corporation reportedly formed partnerships or invested. Toyota was also said to be involved. On the Israeli side, investors included notable figures such as Gil Agmon and Ziv Aviram.
In 2021, REE announced plans to go public via a SPAC merger with X10 Capital Venture Acquisition Corp, valuing the company at $3.1 billion pre-money and $3.6 billion post-money. At the time, investor excitement around EV startups was at its peak.
But the tide soon turned. After the COVID-19 pandemic, global automakers pulled back from outsourcing and began conserving cash. This retreat hit independent EV startups hard. Companies like Arrival, Canoo, Lordstown Motors, and ELMS, all once backed by major automakers, struggled or collapsed. Without sustained strategic support or large customers, most couldn’t survive.
