REE and BorgWarner Unit to Build Next-Gen EV Drivetrains

TEL AVIV, Israel – December 29, 2025 – In a significant move to streamline the development of electric vehicles, automotive technology company REE Automotive and Cascadia Motion, a subsidiary of industry giant BorgWarner, have announced a collaboration to develop and manufacture a new generation of compact electric drive units (EDUs). The partnership, currently outlined in a non-binding Memorandum of Understanding (MOU), aims to merge REE's innovative REEcorner technology with Cascadia Motion's proven iM-125 motor and inverter, creating a powerful, off-the-shelf solution for global automakers.

The collaboration signals a pivotal step toward modular, integrated systems that could dramatically accelerate EV production timelines and offer manufacturers unprecedented design flexibility. By combining REE's all-in-one by-wire corner modules with BorgWarner's established powertrain expertise, the partnership is poised to address a critical need in a market projected to double by 2035.

The Future of EV Architecture: Modularity Meets Integration

At the heart of this collaboration is REE Automotive's groundbreaking REEcorner technology. This system redefines vehicle architecture by integrating all critical drive components—including the motor, steering, braking, and suspension—into a single, compact module that sits between the chassis and the wheel. This approach, controlled entirely by-wire, eliminates the need for traditional mechanical connections, enabling the creation of a completely flat and modular chassis platform.

This innovation offers several key advantages for Original Equipment Manufacturers (OEMs). The flat "skateboard" chassis frees up a significant amount of space typically occupied by engines, transmissions, and drivetrains. This reclaimed volume can be used for larger battery packs to extend range, increased cargo capacity for commercial vehicles, or more spacious and creative passenger cabin designs. For its part, REE Automotive has already validated its by-wire technology, becoming the first company to achieve Federal Motor Vehicle Safety Standards (FMVSS) certification for a full by-wire vehicle in the United States.

The proposed integrated EDU will package Cascadia Motion's iM-125 motor and inverter directly into the REEcorner. The resulting unit is projected to be remarkably compact and powerful, weighing just 54 kg while delivering a peak torque of 3,000 Nm and 100 kW of peak power at the gearbox output. Offering such a pre-validated, high-performance unit as an off-the-shelf product could drastically reduce development cycles and costs for automakers, allowing them to focus resources on brand-differentiating features like software and user experience.

BorgWarner's Strategic Play in a Booming Market

For BorgWarner, this partnership through its Cascadia Motion subsidiary is a calculated move that aligns perfectly with its aggressive "Project Charging Forward" electrification strategy. As a legacy Tier 1 automotive supplier, BorgWarner has been rapidly pivoting to become a dominant force in the EV component space. This strategy has been supported by strategic acquisitions, such as Delphi Technologies for power electronics and Akasol for battery systems, alongside robust internal development of electric motors, inverters, and thermal management systems.

The global market for electric drive units is expanding rapidly, with analysts forecasting a 9% compound annual growth rate (CAGR) as the industry's transition away from internal combustion accelerates. By integrating with REE's novel technology, BorgWarner positions itself not just as a supplier of individual components, but as a provider of highly integrated, advanced systems. This allows the company to capture more value and address the growing OEM demand for modular solutions that simplify manufacturing.

Joseph McHenry, General Manager of BorgWarner Portland and the Cascadia Motion brand, has noted that integrating the proven iM-125 drive unit with REE's technology strengthens their portfolio of electric drive solutions. This move provides automakers with enhanced flexibility in their electrification programs, backed by BorgWarner's global manufacturing scale and reputation for quality. The proposed commercial plan includes a royalty-bearing arrangement where BorgWarner would potentially manufacture the integrated EDU, leveraging its vast production capabilities to serve a global customer base.

Paving the Way for the Software-Defined Vehicle

Beyond the hardware integration, the partnership is a significant enabler of the Software-Defined Vehicle (SDV) revolution. The by-wire nature of the REEcorner technology is fundamental to this shift. With electronic signals replacing mechanical linkages for steering and braking, the vehicle's dynamics can be precisely controlled and continuously updated through software.

This architecture is designed to support the highest levels of functional safety, including Automotive Safety Integrity Level D (ASIL-D), the most stringent classification for safety-critical automotive systems. Furthermore, the integrated system allows for secure Over-the-Air (OTA) updates, enabling automakers to deploy safety enhancements, performance upgrades, and new features to vehicles already on the road. This capability is becoming a critical differentiator as major OEMs like Volkswagen, General Motors, and Mercedes-Benz invest billions in their own SDV platforms.

For fleet operators and consumers, this translates into vehicles that are not only safer but also more adaptable and future-proof. The ability to fine-tune performance characteristics or add new autonomous driving features via a software update represents a paradigm shift from the static nature of traditional automobiles.

Navigating a Competitive Landscape

While the potential is immense, the collaboration enters a highly competitive field. Established automotive suppliers like ZF Friedrichshafen, Bosch, and Magna International are major players in the e-axle market, offering their own integrated drive systems. These companies leverage long-standing OEM relationships and massive production scale. Additionally, specialists like Vitesco Technologies and Nidec are also vying for market share.

However, the REE and Cascadia Motion partnership offers a distinct advantage. Most competitors focus on e-axles that combine the motor, gearbox, and power electronics, but REE's technology goes a step further by integrating steering and suspension into a complete corner module. This holistic approach provides a level of modularity and spatial efficiency that is difficult to match with traditional e-axle designs.

It is important to note that the current agreement is a non-binding MOU. The next crucial step for the partners will be to negotiate and execute definitive agreements that will formalize the commercial terms, including manufacturing rights, supply volumes, and royalty structures. The success of the venture will ultimately depend on securing OEM customers and scaling production to meet demand. Yet, the synergy between REE's forward-thinking architecture and BorgWarner's industrial might creates a compelling proposition that could set a new benchmark for EV platform design and accelerate the industry's electric future.