Magna to build modular electric vehicle with Israeli startup REE
Magna International Inc. will develop a modular electric vehicle with Israeli startup REE Automotive, helping the Canadian auto supplier and contract manufacturer muscle further into a growing field of EV players.
The companies agreed to jointly design, engineer and build the EVs using REE’s platform, the skateboard-like base that supports different vehicle designs on top. The EVs can be built to the exact specifications of “global technology companies and e-mobility players" while speeding their entry into the market, Magna and REE said in a statement.
“Many big tech companies are very much interested in creating mobility services and solutions that are global, big. But they don’t exist today," REE Chief Executive Officer Daniel Barel said in an interview Sunday. “That vehicle can have any brand that the brand owner wants, but it’s powered by REE."
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The location and timeline for production, as well as financial terms, weren’t disclosed. Barel said the companies would split any future revenues generated. The startup has signed agreements representing orders for around 260,000 vehicles that would use REE’s platform, Barel said.
Magna, which has been touted as a potential partner for a self-driving car from Apple Inc., has already made cars under contract for BMW AG and Jaguar Land Rover. Last year it formed a joint venture with Korea’s LG Electronics Inc. to make EV powertrains, aiming to position itself for the boom in electric vehicles. Magna is the world’s third-largest auto supplier, producing everything from chassis and car seats to sensors and software.
The Aurora, Ontario-based company also landed a deal with Fisker Inc. in October to make the electric Ocean SUV, which will be built in a Magna plant in Graz, Austria, starting in late 2022. It’s also expanding its manufacturing footprint in China, the largest EV market, by building the ArcFox Alpha-T for Beijing Automotive Group Co. -- the first vehicle it has assembled outside of Europe.
Magna’s stock price has soared 70% since it announced the partnership with Fisker on Oct. 15, closing at $89.50 in New York on April 9.
Tel Aviv-based REE is one of a flood of EV and battery-related startups that have recently agreed to go public through special purpose acquisition companies, or SPACs. In February, REE agreed to merge with blank-check company 10X Capital Venture Acquisition Corp. The deal valued the combined entity at around $3.1 billion. Magna was one of the PIPE -- or private investment in public equity -- investors that participated in the deal.
The startup’s technology integrates all of the traditional, core components for an EV -- like the powertrain, suspension and braking -- into arched wheel-well assemblies. It then fits those onto the four corners of a flat, modular chassis that can accommodate a wide range of battery packs and vehicle types.
The Magna agreement isn’t REE’s first such deal. In August, the startup set up a partnership to develop electric commercial vehicles with India’s Mahindra & Mahindra.