REE Automotive: Can Software-Savvy Tech Save It From Nasdaq Delisting?

REE Automotive (NASDAQ:REE) finds itself at a critical crossroads. With its stock price languishing below Nasdaq's $1 minimum bid requirement, the company faces a 180-day deadline to avoid delisting—a stark reminder of the fragility of its financial health. Yet beneath the market's skepticism lies a company with a bold vision: to redefine the automotive industry through software-defined vehicles (SDVs). Can REE navigate this liquidity crisis while unlocking the value of its technology? The answer hinges on its ability to stabilize its stock, execute its strategy, and convince skeptics that its tech is worth the bet.

The Delisting Dilemma
As of June 19, 2025, REE's stock closed at $0.808, down over 90% year-to-date and well below Nasdaq's $1 threshold. While the company received formal notice of non-compliance on July 3, 2025, the slide began months earlier. A 30-day streak of sub-$1 trading ended on June 27, triggering a compliance period that ends December 29. To stay listed, REE must achieve a closing price of $1 for ten consecutive days.

The path to recovery is fraught. Even if REE meets the bid price requirement, its market cap—$18.7 million as of July—remains perilously low. A reverse stock split, which could artificially boost its price, is a likely option. Yet such a move risks further alienating investors already wary of dilution. Delisting, while avoidable for now, would amplify liquidity risks and erode investor confidence.

The chart below illustrates REE's precipitous decline, from a 52-week high of $10.80 to its June 2025 lows. The drop reflects broader market skepticism about its execution risks, including tariff-driven production delays and a shift toward software commercialization.

The Financial Tightrope
REE's financials underscore its precarious position. Preliminary 2024 results show a net loss of $111.8 million, with cash and short-term investments at $72.3 million. While this cash buffer may buy time, the company's burn rate—assuming no new financing—suggests it must turn cash-positive within 12 months to avoid insolvency.

The silver lining is its $1 billion in customer reservations for electric trucks and platforms. However, converting reservations into revenue hinges on resolving supply-chain bottlenecks and scaling production. Strategic partnerships with Motherson Group and Roush Industries aim to address these issues, but delays could further strain liquidity.

The Upside in SDV Technology
REE's core asset is its software-defined vehicle (SDV) platform, which allows automakers to customize vehicles via software rather than hardware. Its FMVSS-certified by-wire systems for steering, braking, and driving offer a modular architecture that could reduce development costs for customers.

The market has yet to price in this potential. Unlike hardware-centric peers, REE's focus on recurring software revenue—think licensing fees, updates, and data monetization—could create a scalable business model. Investors in companies like Tesla or Rivian have rewarded similar software-driven ecosystems, even during execution hiccups.

The Strategic Pivot to Software
REE's recent shift toward monetizing software before hardware may be its best chance for survival. By prioritizing partnerships to commercialize its SDV tech—such as with Roush for delivery vehicles or Motherson for supply-chain logistics—it aims to generate revenue sooner.

Analysts at H.C. Wainwright and Roth/MKM have downgraded the stock, citing production delays and concerns over whether software revenue can offset hardware losses. Yet the strategy could pay off if REE's tech becomes a must-have for automakers racing to cut costs and speed up vehicle development.

Investment Considerations
- Delisting Risk: A “hold” rating is warranted until REE's stock breaches $1 consistently. Delisting would likely trigger a selloff, though the company could seek an extension if it meets other Nasdaq criteria.
- Tech Potential: Investors with a long-term horizon might view dips below $0.50 as opportunities, provided REE secures partnerships or secures new financing.
- Execution Uncertainty: The company's ability to deliver on software revenue and resolve supply-chain issues will determine whether its tech justifies its valuation.

Final Analysis
REE Automotive is a high-stakes bet on innovation amid existential financial risks. While its SDV technology has transformative potential, the market's patience is thin. The next six months will test whether REE can stabilize its stock, execute its pivot to software, and prove its technology's value. For now, the odds favor caution—this is a stock for speculators, not investors.

The chart below highlights REE's cash burn and losses, underscoring the urgency of its turnaround. Without a reversal, its survival may depend less on Nasdaq's rules and more on the execution of its software-first vision.

This article is for informational purposes only and should not be construed as investment advice.