- Innovative Business Model: Barel detailed REE Automotive’s unique approach to the EV market, emphasizing their modular, white-labeled EV systems designed for commercial use, particularly in the small to midsize trucking industry. This system allows other manufacturers to adopt their technology easily, fostering a collaborative rather than competitive environment.
- Market Differentiation and Technological Edge: A significant portion of the conversation highlighted REE Automotive's proprietary "drive by wire" technology, which integrates core vehicle components into a single module. This innovation not only streamlines manufacturing but also enhances vehicle reliability and maintenance efficiency, distinguishing their products in the EV space.
- Strategic Market Focus and Growth Plans: The dialogue explored the company’s targeted approach to the midsize commercial truck market, a niche that benefits from mature charging infrastructure and lucrative incentives. Barel shared ambitious sales targets, aiming for $1 billion in sales by 2026, with strategies to achieve this through a combination of direct sales and partnerships with established OEMs.
- Challenges and Adaptations in Commercial EV Adoption: The discussion also covered the specific challenges of transitioning commercial fleets to EVs, such as the need for reliable charging solutions and overcoming initial capital expenditure hurdles. Barel explained how incentives and total cost of ownership calculations are crucial in convincing fleet operators to switch to EVs.
- Leadership and Investor Engagement: Lastly, the interview provided insights into Barel’s leadership style and his proactive approach to investor communications. He emphasized transparency and frequent updates as key to maintaining investor trust and driving the company forward.
Katie Perry (00:00):
I'm Katie Perry.
Austin Hankwitz (00:02):
And I'm Austin Hankwitz. And this is After earnings, the show from Morning Brew and Stakeholder Labs that brings investors up close and personal with the executives behind the world's most interesting companies.
Katie Perry (00:13):
And today we're talking with Daniel Barel. He is the co-founder and CEO of REE Automotive. They're building commercial EV products and services for the small to mid-size trucking industry. And he describes re as a completer, not a competitor because essentially what they're doing is building modular commercial EV systems that can be white labeled by other manufacturers. We also got into some of the nuances between commercial and passenger ev. So if you're investing in that space, you're definitely going to want to listen to that part.
Austin Hankwitz (00:45):
And this interview was an interesting one because Daniel's Company Automotive, again, is not only building this sort of white labeled drive-by wire technology for other OEM manufacturers, but he took the tech to go build his own mid-size commercial trucks. We spent some time digging into their three-year plan on how they want to generate a billion in sales by the end of 2026. Little side note, they are pre-revenue at the moment, but we also talked about Daniel's leadership style as well as his own daily driver. Spoiler alert, it's not what you'd expect. So let's get into the interview. Daniel, thanks so much for hanging out with us and joining us on this episode of After Earnings.
Daniel Barel (01:29):
Thank you so much for having me.
Austin Hankwitz (01:32):
So let's jump into things, right? You are the CEO of Re automotive. What is re automotive? What do you guys sell? Who do you sell it to? Why are they buying it? Just give me the whole breakdown of your company.
Daniel Barel (01:45):
So Reason is an automotive tech company. We utilize advanced software and hardware to modernize commercial vehicles industry by creating smarter electric trucks that are designed to deliver greater efficiency, lower total cost of ownership and enhanced safety. I founded it together with my co-founder 10 years ago with a vision of expediting and solidifying vehicle electrification through white label technology approach. Basically we complete, we don't compete. And if you think about electrification 10 years ago it was very much a question of if and not a equator of when back then. And our core technology is what we call the re corner. It's an advanced by wire software and hardware mash that packs the core components of a vehicle, steering, braking, suspension, powertrain, and control into a single and compact module position between the chassis and the wheel. This basically eliminates all the mechanical, all the legacy mechanical connection, enabling a pure software driven vehicle and the three corners, the by wire technology or as we call them, X by wire.
(03:05)
It's been the fundamental technology and our key differentiator throughout many years. And although many, many have tried before, we are the first and currently the only one to have ever certified and deliver a full wire vehicle earlier this year. On the heels of that certification, we also started to deliver first vehicles to our customers and the first product is called the P seven C and it's a medium duty truck, electric truck. So last to meet my deliveries, the UPSs of the world and others market wise, we're concentrating on the medium duty segment, so it's about 200,000 new trucks a year. And if you look at that specific market, it has that specific segment. It has very mature charging infrastructure, very lucrative federal and state incentives, and that basically makes that segment of the market the fastest and strongest growing EV segment in the industry and we actually expect it to continue growing going forward.
Austin Hankwitz (04:24):
So just to jump in here, you're saying that you sell two products, one the PC seven, which is like this midsize truck thinks like the Amazon delivery truck or the UPS, things like that. And then you also sell this modular drive by wire unit that you then upfit into existing trucks.
Daniel Barel (04:47):
That's a great, great question. So think about us as Intel inside or auto. So the goal in the next few years is that every truck manufacturer would be using our by wire corners, but in order to kickstart this market and supply the strong demand we see today, we're not waiting for those OM to come in. So we are working with several OEMs, some of them for years now in adopting technologies and allowing them to use ours in that example of Intel to have a Dell and noh or any other brand with Intel inside or the sticker we know. So essentially the key differentiator is the wire technologies, the re corners, but we also currently selling in the market the first ever powered by re truck, which is ours, which is called the P seven C,
Austin Hankwitz (05:43):
P seven C. Sorry, I misspoke there. Okay, that makes a ton of sense. Thanks for breaking that down.
Katie Perry (05:48):
And Daniel, you touched on something I think is important to call out for the listeners and that is some of the nuances between commercial EV and passenger EV when it comes to companies like yours and people building in the space. I would love to hear a voiceover on why the mid-size truck, I think it's the class three to six I want to say, is that correct?
Daniel Barel (06:13):
Three to five, yes. Three to
Katie Perry (06:14):
Five. What specifically about how those types of dealers and trucks operate makes them the most ripe for commercial EV specifically when it comes to the infrastructure of EV including charging?
Daniel Barel (06:32):
Well that's a really good one because a lot of people don't differentiate between one commercial vehicle and passenger vehicle and of course the breakdown within those segments. So first and foremost, these markets are completely uncorrelated. So although we see some slowdown in the passenger vehicle segment of the EVs mainly around saturation and quite strong adaptation over the past few years, the commercial segment is just starting and the demand is really, really strong. But many two, maybe three reasons. One, at the end of the day regulations, many government including the US but everywhere around the world have been very clear in carbon emission goals and the ability to put ice internal combustion engine ice vehicles on those roads and by somewhere between 2030 and 2035, you won't be able to do that. And we saw the latest just a week ago, the latest EPA update on those emission goals.
(07:44)
That's one second, at the end of the day when it comes to commercial trucks, TCO, total cost of ownership is what makes the decisions. It's not just the acquisition cost, right? Because think about it, is it a good deal if I'll give you a truck that cost a third but breaks down five times more? Not sure, right? So the industry calculates it according to TCO, you take the acquisition code, the residual value, the maintenance, the support, the cost per mile, et cetera, et cetera, and you come up with a number and you can compare apples to apples and EVs in general drive, TCO down and our trucks by wire trucks repower by re drive it even further down making one of the best TC operated out. And this is very important for that industry because at the end of the day, these are work trucks, they need to make a buck for their owners and third, we should temporary, we can't count on that is there are very strong incentives in that segment. So if you look at a Tesla's segment for example, you can get between five to $7,000 back when you buy an EV in our segment three to five, you can get up to $110,000 back on about a hundred hundred and 50,000 bucks truck. So it's actually cost you after the rebate about half of a diesel one.
Katie Perry (09:18):
Got it. So those incentive are designed to create some parity at the beginning, reduce some friction to switching. Interesting. Thanks for breaking that down.
Daniel Barel (09:29):
Of course.
Austin Hankwitz (09:31):
Now I
Daniel Barel (09:31):
Imagine, and by the way, one more thing about that is range, that specific segment is not the long haul, right? It's not the 500 900 miles coast to coast, et cetera where range anxiety or charging infrastructure, these trucks go 150, 200 miles a day and that's easily achieved today. With today battery technology and also the charging infrastructure within the depots is mature enough. It's an important point.
Katie Perry (10:01):
That decision and that last mile is there's a depot and there's planned routes and it's very controlled how far they're going. And so it's really a matter of does that depot have petrol or does it have a charger? And either way it works similarly.
Daniel Barel (10:18):
Correct.
Katie Perry (10:19):
Got it.
Austin Hankwitz (10:22):
Coming back to this idea of incentives, I mean I think I saw that you guys are working now with 66 different dealers to help get the word out. You have an order book of about $50 million. You're essentially those still pre-revenue, but nine months ago you laid out this sort of three year plan to deliver a billion in cumulative sales through 2026. So according to that plan, you should be delivering a few hundred vehicles by the end of this year. What's the update on the plan?
Daniel Barel (10:53):
So the simple update is that we're on track on the plan we laid out. That's the simple answer. As you mentioned, we're targeting to sell about cumulatively about 6,000 trucks in the next three years, which is roughly 1% of the market. That's all. And if you just 6,000 trucks multiplied by just over 150,000 bucks per truck, you get to the billion that you mentioned. So that's one. Speaking about where we are, so 2023 was really a pivotal year for us at re we achieved very important key milestones in line with our original timelines and basically de-risk the go forward path and it allows us to advance the state of the arc in the medium duty commercial vehicle space by orders of magnitude compared to other offering both EVs and ice like we talked about. Basically if you look at our latest shareholder letter that we released a couple of weeks ago, you'll see that much of the heavy lifting is behind us on this path to commercialization, right? Our technology is mature, tested, and powered by vehicle are certified with the first to have F-M-V-S-S-E-P-A and carb out there. And that gives us the incentives and the order book that you mentioned is driven by the strong demand we see from leading fleets and dealers and we actually grew our order book by more than 900% from the beginning of the year till today reaching more than $50 million, which is a very substantial amount for a commercial vehicle fleet for EVs.
(12:47)
And that represents a few hundreds of trucks powered by which is important because this is what we need to get to the positive unit economics that makes us so unique. Now we have now about 66 points of sales and service across the US and Canada, which makes it probably one of the largest pure EV service networks out there in the commercial segment. That's huge. And think about those dealers. Our dealer network is servicing the largest and the smallest fleets you can think of. Some of them are huge and some of them are small, but at the end of the day, more than 70% of all trucks in that segment are going through DIT and they've been doing this for decades. And I think that the important thing that we're doing now is we kicked off a demo program that we're giving, selling actually trucks to our dealers. Those dealers get to show them to the fleet customers, the fleet customer experience, the tech experience, the benefits, and putting the following orders for 20 25, 20 26 to get to the 6,000 to the 1%, which from what we see now, we believe this demo program will have a flywheel effect on orders as more and more and more fleets get to test it, try it out and experience the benefits.
Katie Perry (14:24):
I caught your articulation of comparison to tech versus auto and one thing I think that's interesting in tech is this idea of switching costs when a new tech comes along, even if there's price parody, there's sometimes a little bit of pain associated. It could be pain in terms of changing internal people working on it, different skills required, and it feels like part of the success of your go-to market really hinges on how to reduce this friction. And I would love to just hear about the sales process. Somebody demos one of the automobiles, they love it. What then? And it seems like an interesting challenge, right? Because this is an investment in the future to reduce costs in the future. What kind of goes into getting people to think about switching and what are your plans to convince them to convert once they have the demo under their belt?
Daniel Barel (15:22):
Yeah. Well first it actually starts way before then because what makes us really unique in the industry is that I think we're the mirror image of what Henry Ford Senior used to said many, many years ago that on model T that you can get it in any color you want as long as it's black, basically saying there is there's one model, you can have it or you can't or you don't, right? We are very, very much attuned to the voice of the customer. We actually build this truck together with leading fleets. We bring the tech methodology of the design partner. We have been working for years with leading fleets, global fleets in designing that truck listening very carefully to what's important because when you bring a commercial vehicle in, you have to justify every bit of it dollar wise. I'll give an example, we have four motors, one in each corner.
(16:29)
So usually traditionally fleets will say no, we'll just have one or two and we'll save a couple of hundreds of dollars on costs. And you have to show them that actually by having four motors you have more region regenerative energy, you can region more, you spend less energy, you need less batteries. Batteries are very expensive, you have more payload and the math shows it's actually better. And you start there and then, or for example, our driver centric cabin, one of the biggest hurdles in last mile today is drivers and flips are trying to get better vehicles to attract drivers to sign in with 'em. And we have a very, very drive centric cabin. So all of those come together and then we bring it to the market, you certify it, you test it, you certify it's there, and then you start to sell process. And this is where you can go both ways, sorry, in either of two ways, not both. One, you can do the direct approach like Tesla that they sell direct or you go through the dealers. We decided to go through dealers mainly because of the reason that they're so good in what they do. So basically the thing they've already forgotten, we have not learned if we're honest and the relationship that they have with those fleets go decades back.
(17:55)
So they basically call up their fleets that they've been buying trucks from them for years. Say, Hey, we've got something new for you to try out. And they come in or they go to them, they try it out for a day or two a week or couple weeks, put it in day-to-day usage. And then when they like it, they put in the orders for the next batch and the next batch. And before we take those orders, we make sure they understand what it means to charge them if they have the right infrastructure and so on and so forth. That's second and third. And probably I would say the most important of them all is service. You cannot sell a truck, a commercial vehicle without ability to service it. And this is why the 66 points of sale and service that we have, probably the largest one in North America for pure reviews is so essential because if something happened, they drop in at one of those stations if they come to it themself and we get them back on the road.
Katie Perry (18:57):
Real quick, what does service look like for a commercial EV versus a traditional commercial vehicle? The mechanics that are servicing these commercial vehicles now, how do they compare contrast to whoever's working on these in the future? If they're ev?
Daniel Barel (19:20):
Oh,
Katie Perry (19:21):
Is it more like a software background focus, you need almost more than a mechanical training or is that a very different profile of worker that's actually manning those places?
Daniel Barel (19:33):
So traditionally when it's digital, you either hammer things into place or you have to have a very, or basically you have a very big, big inventory that you have to hold because if you're missing one part, the vehicle is decommissioned or it's on a lift for a few days and it's not making money and that's a big issue. So you have to have very big inventory of spare parts, whether if you service them yourself at your depot or at the dealer. EVs have significantly less moving parts, therefore are less prone to break down, but you still have to service them, you still have to have spare parts and everything else. What's really cool about and our re corners is that remember everything sits in that corner and it's a compact module. So that module, if something doesn't work, it's software driven. So 80% of cases we solve over the air, we just send a code and fix it like your Mac.
(20:44)
But if something breaks and commercial vehicles, things break, right? Instead of three days on a lift trying to fix stuff and wait for parts, you basically can swap out and in a corner in less than one hour and get back on the world really similarly to an F1 pit stop, you come in, you put it on a small lift, unscrew the corner, take it out, bolt a new corner in. Now the corners are identical, front and rear left and right. It's the same corner. So you basically stop one part, she's a corner, just bolt it in, it takes you about mechanically, physically basically 20 minutes. And after that 20 minutes it's in place. Then the system takes about another 40 minutes to recalibrate safety checks, security, cyber updates, et cetera, and you're back on the road. And that's stats gold for commercial trucks.
Katie Perry (21:48):
So what you're saying is I could do it, maybe not, we'll get into it, but I don't drive. So it would be amazing if I could have this job. But thanks for that, that was really interesting.
Austin Hankwitz (22:00):
Now before we jump into a couple more questions here about your leadership style. I'm sure a lot of retail investors listening right now would see that you guys just recently raised, I think it was $13 million worth with a public offering additional 2 million on top of that opportunity. So the opportunity to raise a total of 15 million here, 2023 was a pretty cash heavy year. You guys burnt 93 million, you've got 71 million more of cash in the bank, another 15 million in the form of a credit facility. What is the plan to stay solvent in 24, 25 and 26 as you deliver upon these, call it 6,000 vehicles without perpetually diluting existing shareholders?
Daniel Barel (22:43):
A question I'll just maybe start by saying that we didn't burn through. I look at it more. We spend strategically and now with the majority of the heavy lifting behind us at this point, we expect to be able to drive down our spend looking forward. So that's one. But listen, we've been doing this for more than 10 years and we've always been very disciplined in our cash spend and being very disciplined in cash spend is one thing, but it's a completely entirely different thing to do that while meeting your targets. And that's what we've done in 2023 when what you mentioned earlier, and I think we did even more in 2023 because not only we met all of our milestones, we did it while cutting cashflow by 25% year over year while meeting those milestones. So we are very, very, very disciplined and we've always been, it's not just because of the recent macro environment.
(23:56)
And I think that what being disciplined means is finding new ways to meet your targets in a more efficient way. Now listen, we are very confident in our market position, in our technological leadership, but we also recognize the challenging macroeconomic condition, right? It's quite obvious and we're doing what we can to combat these external forces including securing funding with favorable terms. We secured about 24 million in the past few months in very favorable terms compared to others in the market. And we're doing it because we are very mindful of shareholders dilution and I think that's what's characterize us out there. So we want to ensure operational efficiency while being mindful of shareholder dilution. And maybe lastly I'll say that while others in the industry are burning through hundreds of millions of dollars or maybe billions for some, our working capital needs going forward for producing our pipeline are very modest. We're talking about double digits of millions only for the next couple of years when we ramp this up. And I think this is a very, very important differentiator for us in our industry.
(25:38)
I think that now with the heavy lifting behind us, the tech proven the investment that we already have done and made in the production of the corners, the re corner plan that is up and running with ample capacity and the growing order book, I think we're in good shape for success. The only thing we need to do now is complete the working capital raise that we need because as you mentioned, we have enough money currently in the bank for daily operations. We want to make sure that we have enough to see the production through in the form of working capital. And once we secure the required working capital for the current order book will go and produce, we will not do that before. To your point, I think it would be irresponsible on our part to start scale production without being able to see through and putting our shareholder at risk because that would require us to potentially look at highly dilutive funding because you will be between the hammer and the har place, which the hard, which makes no sense. So we want to make sure that we have all the working capital needs in advance and then kick off the serial production.
Austin Hankwitz (27:12):
I think it makes a ton of sense. And just for added clarity, when you say unfavorable macro economic uncertainty, what does that mean? I'm seeing record high stock market GDP growth in 24 is going to be 3% record low unemployment. So what are you alluding to when you say that
Daniel Barel (27:31):
If you take out the mag seven, I think you'll see a different market, the magnificent seven, right? The main different markets are different. We've seen high interest levels that are not going down as fast as people have been thinking. We've seen difference risk appetites in recent quarters with investors and I think we need to recognize it as a company and we need to make sure that we are very, very, very disciplined in how not only we spend the cash that we have, but also how do we raise additional funding and what do we use that funding for? And we've been very, very open, I think very open with our shareholders in the market about what we need exactly and what we're going to do with them.
Austin Hankwitz (28:33):
Got it. So you're talking about it from a liquidity perspective versus a revenue generation or order book perspective. You're saying the order book and the underlying economy, it's very healthy, you guys are seeing a big pipeline and you're really excited to deliver upon these 6,000 vehicles, but from a fundraising perspective it's a little rocky, which I would agree with obviously.
Daniel Barel (28:53):
And I think it's very important to recognize that investors, especially retail investors, but not only put significant funds into us and expect that to treat it with the utmost respect of their money because that's what funds us and we do exactly that and this is why we've been cutting costs year over year by 25%. This is why we've been very deliberate in making sure that we have all the working capital funding we need in order to go to market. So we've spent all the money that we needed on the development of the tech, the r and d that's done, that's certified, that's behind us. We spend all the money we need on the production line of the corners that's done. We spend all the CapEx tooling on those corners. That's done. What we need to do now is to raise the required working capital to bridge between when we order the parts to where we sell and get paid for the 50 million order book that we have. And once we have that, we'll go to produce, we'll complete the other parts of the tooling program that we have. We'll kick off a contract manufacturer in the US to assemble the vehicle of course, and then we're off to the races. But I think that's the responsible approach to make sure that you can see it through, especially in today's market and not come out short and say, oh, I'm missing some funding but now I have to take an unfriendly term or funding options.
Austin Hankwitz (30:38):
I think it makes a ton of sense. I appreciate the walkthrough
Katie Perry (30:41):
And Daniel, I really
Daniel Barel (30:42):
Hope it does.
Katie Perry (30:43):
I appreciate you speaking directly to retail shareholders and I noticed you've done AMAs on Reddit in the past. You've been really appreciate you coming on here today and breaking down all of these things because I think some leadership, they put the investor deck out and they're like, figure it out. And as we've been going through, there's a lot of nuances here. And so how do you feel about your role as a CEO in helping demystify some of the nuances of business that might not come across in shorter form content and is this something you plan to continue doing as the company journey continues?
Daniel Barel (31:20):
The simple answer is yes. I think this is of paramount important. I'm very accessible either on a MA on LinkedIn. I make sure to personally reply to anybody who asks something or messages me. And of course to the extent that we can, of course we can't share non-public material information, but for everything we can do better work in explaining or take advice or making sure that maybe something was not clear. That's not only mine, our entire leadership job to do. We also do that through the few trade shows that we take part of part in. We did one a few weeks ago in Indianapolis, next one is in Vegas in a few weeks time. And this is where we get the opportunity also to meet not only our peers in the industry and our suppliers and customers, but also many of our investors who come in and say, Hey, I'm an investor. I had a question. And I think this relationship is super important because I mean, let's be honest, we can't do what we do without our investors, as simple as that. They are part of what makes us who we are.
Katie Perry (32:41):
And it seems like similar to the way you're getting feedback from the dealers, from investors, those conversations might actually inform how you're describing certain parts of your business, certain aspects of your progress because you don't know what you don't know. And having that direct communication could unlock some insight that might be able to help your positioning in going to market.
Daniel Barel (33:04):
Absolutely. I mean, one good example for that, if you take a look at our latest shareholder letter from a few weeks ago, we literally did a check the box exercise for each of the division. We did, Hey, this is what we promise you we're going to do. Check, check, check, check, check. And that's what left for us to do. So we also laid out what's coming to make sure that everybody understands what we're concentrating on. And we did it across tech, operational, business and finance. And we've been very, I hope that we've been very, very clear to saying, Hey, this is what we promise you we are going to do and this is what we did and this is what we have yet to do and we're on it. And I think this is important for everybody, of course, institutional investors, but also the retail because we want to make sure that we communicate what we're doing as clearly as we possibly can.
Katie Perry (34:02):
That makes a lot of
Austin Hankwitz (34:03):
Sense. And to linger on this kind of questioning around the leadership style, right? I would argue, I mean to your point, you guys been around 10 years, I mean you guys have been here and I'm sure you still have some early employees that have stuck around and they're excited to see this get across the finish line. So talk to me a little bit about how you keep employee morale so high, how you keep driving home the mission of the company and how you just keep things moving up into the right internally.
Daniel Barel (34:34):
Oh wow. Really simply, we are the flattest organization, I think on the planet flatter than a pancake. I think there is no hierarchy. Everybody can and should have a say, we hire only the best. It's very, very difficult to get accepted. Agree. And we make sure that if you're on board, you get the resources, capability, responsibility to do what you think is right. Nobody's going to tell you what you need to do. You need to tell everybody what you think we should be doing. And everybody has a voice. So everybody sits in one big open space everywhere around the world. It's very friendly. Everybody. We form ad hoc teams all the time and we beg them and form a different one according to what we need. And in almost all cases, I mean the best idea in the room, the smartest idea in the room hopefully wins.
(35:35)
There's no hierarchy. That's, and two, as I said, we hire only the best, literally the best. I know everybody says that, but team Re is the best team I've ever, ever had the privilege of working with. And we are one team, that's how we work. We are one team and we make sure that we work really hard, but we also appreciate the time together. We make sure that we enjoy the ride as much as we can. Some days are not that fun, but most days, and we make sure that we communicate internally basically as flat as we can. There is that we are very, very data focused. So if you come in and say, Hey, I feel that A, B and C, then that's a little bit tricky because feeling is less. We don't know what to do with those feelings, please not work. But if you can show numbers around what you think and those number hold done, that's yours, go execute. And this I think allows us to be the first to specify full by wire vehicle. Many have tried for years for 30 something years people have been trying to do by wire vehicles. I mean planes fly by wire for 50 years. But think about it, A pilot is a very, very, very trained professional and usually you need two to figure out stuff. So we needed to take that tech and bring it to auto where everybody could drive it. Right?
(37:24)
Even you Katie, right? Everybody can drive it. I drive even Katie Perry. And by the way, you should definitely,
Katie Perry (37:32):
I was going to say, is that a challenge? Can we get this teed up?
Daniel Barel (37:37):
Done?
Katie Perry (37:38):
Okay, we go, I'm assuming the vehicle's insured and it's all good there just in case. Yes.
Daniel Barel (37:45):
Alright. You won't need it because it's the safest out.
Katie Perry (37:48):
Amazing.
Austin Hankwitz (37:50):
Our next episode, that Daniel's going to take place in a P seven C, it's going to be great.
Daniel Barel (37:55):
I'll take you on that. Amazing. We ran two consecutive winter tests, right? And we tested those in the Arctic Circle in minus 30 degrees. Negative
Austin Hankwitz (38:03):
30 degrees Celsius.
Daniel Barel (38:05):
Yes. And Ferna, right? It's more, less the same. And once of the test we try to do with the wire is to overs steer it. We drove over a completely frozen lake, right? Zero traction and you try to overs steer, as disappointing as it might be, just won't over steer because the B wire keeps you safe, right? You have always steer or all wheel brake or wheel drive, so many redundancy, the computer, everything. And this is real time. So
Austin Hankwitz (38:40):
I love it. Well, speaking of driving and over steering, Katie obviously lives in New York so she's not driving too much, but I drive a fifth gen Toyota four runner. When you're not driving the P seven C, where do you driving? What's your daily driver, Daniel?
Daniel Barel (38:58):
That's a good question. I'm driving a tiny electric Fiat 500 convertible.
Austin Hankwitz (39:12):
Very cool, very cool, very cool.
Daniel Barel (39:15):
And I love it. Absolutely love it.
Katie Perry (39:19):
That's awesome. And also looked at your Twitter before this. That's what I do saw you had some Peloton content. So got to ask, when you're not driving and you're riding, who's your favorite Peloton instructor?
Daniel Barel (39:36):
That's a good one. So that's a good question. So, oh, I have to get back to you on that because it's a hard question. It is a hard question. And where was it? I think I was in, yeah, I was in the UK and an airport in a connection and I was sitting in the lounge and suddenly I see somewhere in the corner, a Peloton bike, and I said, Hey guys, do you happen to have showers? They go, yeah, sure, thank you Brooklyn one. And I went out in the middle of the airport, took it to the side and had a great workout and li my way back to the airplane a couple of hours later.
Katie Perry (40:27):
That's amazing. I've never seen that in the us.
Daniel Barel (40:31):
I think somebody just left it there. I'm not a hundred percent sure it was supposed it's part of the venue, but it was a lot
Katie Perry (40:38):
Of fun. Daniel, I would've on the same exact thing, I might've missed my flight, so I'm right there with you. If it's just sitting there, might as well.
Daniel Barel (40:46):
Exactly. Yeah. Love it. Absolutely
Austin Hankwitz (40:50):
Daniel, what a great conversation, man. Thank you so much for joining us on this episode of After Earning and hopefully the retail investors listening right now. Not just learned about the awesome trucks you're creating, but the pioneering you're doing with Drive by Wire. I mean, to your point, right? First commercial use case here. So really, really exciting to have this conversation with you man. And hopefully we'll see you again pretty soon,
Daniel Barel (41:11):
Looking forward to it. And thank you so much. It was so much fun.
Austin Hankwitz (41:15):
Daniel, what a what an awesome interview. And heck, I learned so much about automotive. I mean I kind of knew what they did, but after that conversation I feel like I'm dialed in.
Katie Perry (41:26):
Yeah, I feel like I'm a commercial EV expert almost. I got to say my favorite part was Daniel telling me I could both fix and drive one of their commercial EV trucks. So me and my unused New York license plate are ready for that. He promises it's insured. So we're good to go whenever he's ready. We are. And we'll be sure to stream that here if we can. But more importantly, I was really interested to dig in with him on the Go-to-market strategy. He's switching dealerships and fleets over from the traditional trucking setup they have to ev. And there's obviously a lot of points of friction there. There's a business case in the long term to reducing costs over time with ev, but that doesn't come without some sort of pain in the interim in terms of different ways of handling maintenance and charging ports and infrastructure.
(42:14)
And so it was really interesting to hear from him how they're working closely with dealers on the ground as they bring these things to market because really that conversion is going to make it or break it for them when it comes to fulfilling their plans. And I also thought at the end he was really transparent and talked a lot about why speaking to retail shareholders is so important. As you alluded to, this is a very complex industry to be in. There's regulatory considerations. There's specificity around the auto industry, around tech, around ev. So it is a more complex story to tell investors. And so I think he recognizes that having more conversations with retail investors is going to benefit him with that audience in the long run. For you, Austin, what stood out?
Austin Hankwitz (43:01):
Yeah, I totally agree. I think something that he mentioned that was really cool was he's like, listen guys, this isn't a truck that's going to drive 900 miles. We are not the 18 wheeler. We are the truck that's going to deliver your Amazon package or the UPS truck. These have a very clear route every single day. It's 80 miles, a hundred miles, 150 miles and that's what we're building for. And I thought that's really cool, right? Understanding exactly what you are building for and towards so that you can build the best product possible. An interesting interview to say the least, I think this whole company comes down to their ability to really deliver upon this $50 million order book. They're aiming to deliver 300 vehicles by the end of 2024. They've sort of already sold those vehicles to dealers and other customers, but now they're now trying to figure out how do we raise the money to actually go about building them and making sure we can start making money as a company.
(43:58)
And that's the real story with this stock in my opinion. If they can raise the additional capital allowing them to manufacture and deliver those 300 vehicles, then they're break even and they're off to the races, that puts them well on their path to generate that billion dollars in sales by the end of 2026. If they can't raise the funds needed, then they're toast or would have to dilute their existing shareholders even more. So it's really up to you as the retail investor to believe that they can accomplish this feat of raising more money, which I hope they do. I hope they get it. I hope they generate the billion in sales and I hope they prove everyone, including the stock market completely wrong. But that's the real story here. Will they, they be able to deliver these vehicles and break even and then it's just off to the races or is time working against them? Who knows? But nonetheless, I learned a lot and I thought it was an awesome conversation.
Katie Perry (44:51):
Totally. And as a reminder that Billion's going to come from what Daniel described as 1% of total new commercial mid truck sales. In his words, that's all they need between now and 2026 to hit that billion dollar mark and they got the a hundred K in tax incentives in some markets and states working for them where essentially some of these potential customers are getting heavy, heavy discounts in the form of EV credits for moving in this direction. So something's working in their direction. Really interested to hear from Daniel in the future and get an update on the plan as time goes on. And with that being said, I'm Katie Perry
Austin Hankwitz (45:32):
And I'm Austin Heitz
Katie Perry (45:33):
And this was the After earnings podcast brought to you by Stakeholder Labs and Morning Brew.
Austin Hankwitz (45:39):
Be sure to like subscribe and don't forget to share this episode with a friend if you learn something and we will catch you on our next episode.
