Penske Truck Leasing to offer REE electric truck to fleet customers

Penske Truck Leasing will offer an electric truck from REE Automotive to customers at its more than 2,650 rental locations in North America, a win for the electric truck startup in a challenging sector.

Ree is an Israeli electric truck startup pitching a technology different from most of its rivals. It has developed drive-by-wire wheel modules for each corner of the vehicle. The modules house powered wheels, braking and steering functions. The drive-by-wire system omits the mechanical linkage in other vehicles.

The modules allow for a flat skateboard platform, creating a low step-in height with more room for cargo or passengers if used as a shuttle. The vehicle has significantly more agility — especially useful in dense urban environments — than other commercial vehicles.

REE's P7-C electric truck for Penske has a range of up to 150 miles. The truck has a 16-foot Wabash body with a ramp.

The company's partnership with Penske Truck Leasing is a boon for the electric truck and chassis company at a time EV startup successes are rare. Electric trucking is an extremely competitive market replete with well-capitalized veterans including Ford, Chevrolet, Dodge, Freightliner, Hino and Isuzu.

It's also an industry of long-standing relationships and few successful new entrants.

"The biggest fleet in America is offering our very truck," said Daniel Barel, CEO of REE.

REE focuses on fully flat electric chassis for Classes 3, 4 and 5 that can be offered either stripped or with a cab.

Penske Truck Leasing said it plans to test the technology internally to understand its capabilities, range and payload. It will then match the truck with customers who historically have tried other new technologies.

Once the truck is out for demos, REE expects customers will order it, though Barel said the order numbers via Penske are "yet to be seen" and he did not have a prediction for their volume. Other orders have come from industries such as leasing, shipping and logistics.

Paul Rosa, the senior vice president of procurement and fleet at Penske Truck Leasing, said the firm was moving "a little bit faster than we normally do" with manufacturers, but that's because of "the upfront comfort that we had from the initial meetings as far as how they share their vision, how they shared their evolution, how they shared their approach to the product."

"That's what made me feel more comfortable," he said.

Ree said its order book has grown 900 percent year over year and now stands at more than $50 million.

Although REE had only about $58 million of working capital to cover $93 million in free negative cash flow in the fourth quarter of 2023, it reduced that burn rate by 25 percent since the year prior, according to financial performance filings. In March, the firm raised nearly $15 million.

Still, REE says it will need more working capital for a ramp-up in production forecasted for the fourth quarter.

"This is what it means to be disciplined: I can go to production today, but there is a chance that if the macroconditions continue to be unfavorable, we will be in a position where we will be depleted out of our cash," Barel said. "Then it's game over or spiraling, and we refuse to do that."