REE & BorgWarner Forge Alliance for Next-Gen EV Drive Units

TEL AVIV, Israel – December 29, 2025 – In a move poised to accelerate the automotive industry’s shift to electrification, REE Automotive Ltd. has announced a strategic partnership with Cascadia Motion, a subsidiary of a global Tier 1 supplier, BorgWarner Inc. The two companies have signed a non-binding Memorandum of Understanding (MOU) to jointly develop, manufacture, and commercialize a new generation of compact electric drive units (EDUs) for automakers worldwide.

The collaboration aims to integrate REE's groundbreaking REEcorner technology with Cascadia Motion's proven iM-125 motor and inverter module. The resulting product is intended to be offered as an off-the-shelf solution, a strategic move designed to shorten development timelines and reduce complexity for Original Equipment Manufacturers (OEMs) racing to expand their electric vehicle lineups.

A Strategic Synergy for Scalability

This partnership represents a powerful synergy between an agile innovator and an established industry titan. REE Automotive, an Israeli tech firm, has garnered attention for its radical approach to vehicle architecture, but faces the classic startup challenge of scaling production and achieving global market penetration. BorgWarner, with its subsidiary Cascadia Motion, brings over a century of automotive manufacturing experience, a vast global supply chain, and established relationships with nearly every major OEM.

The proposed arrangement would see BorgWarner manufacture the new EDU under a royalty-bearing agreement, providing REE with a crucial revenue stream and a clear path to high-volume production without the immense capital expenditure of building its own global factory network. As part of the plan, REE intends to grant Cascadia Motion access to its existing EDU assembly line, tooling, and supplier network, facilitating a smoother ramp-up.

"Integrating Cascadia Motion’s iM-125 drive unit with REEcorner technology bolsters our portfolio of off-the-shelf electric drive solutions, providing our customers with even more flexibility in their electrification programs," said Joseph McHenry, General Manager of BorgWarner Portland and the Cascadia Motion brand, in a statement. "This collaboration reflects our commitment to delivering innovative, ready-to-integrate drive units that help OEMs reduce development time and streamline vehicle launch."

For REE, the alliance is a powerful validation of its 'complete not compete' business model, which focuses on licensing its advanced technology platforms to established manufacturers. "We believe that this MOU with Cascadia Motions represents a natural progression of our three-year collaboration and reinforces our mission to accelerate the industry’s transition to software-defined, by-wire mobility," stated Daniel Barel, CEO and co-founder of REE Automotive. "We believe this collaboration positions us to meet global demand at scale."

Redefining the Electric Drive Unit

The core of the collaboration's competitive advantage lies in what the integrated EDU contains. While the market is populated with integrated drive modules from giants like ZF, Bosch, and even BorgWarner's own portfolio, these typically combine the motor, inverter, and gearbox into a single e-axle assembly. The REE-Cascadia unit promises something far more revolutionary by embedding the entire vehicle corner into a single, smart module.

REE's proprietary REEcorner technology packages all critical vehicle functions—steering, braking, suspension, and the electric motor—into the space between the chassis and the wheel. This is enabled by a full "X-by-Wire" system, which replaces heavy, complex mechanical and hydraulic linkages with digital, electronic controls for steering, braking, and driving.

This radical repackaging unlocks unprecedented design freedom for OEMs. With all the traditional drivetrain and chassis components moved to the corners, the vehicle platform can be completely flat from end to end. This 'skateboard' chassis can yield up to 35% more interior volume for passengers, cargo, or larger batteries, all within the same vehicle footprint. The resulting lower center of gravity also promises enhanced stability and handling.

The new EDU, combining Cascadia Motion's powertrain with REE's corner architecture, is designed to be a compact powerhouse. According to specifications, the 54 kg unit will operate on a 400V system, delivering a peak power of 100 kW and a formidable 3000 Nm of peak torque at the gearbox output. This level of performance in such a modular package is aimed squarely at a wide range of commercial and passenger vehicle applications. Furthermore, the integration with REE’s vehicle control units is intended to support the highest levels of functional safety (ASIL-D) and allow for secure, stable over-the-air (OTA) updates, a key feature of modern software-defined vehicles (SDVs).

A Pathway to Mass-Market Adoption

The timing of this announcement is critical. Industry research estimates project the global EDU market will double in size by 2035, growing at a compound annual growth rate (CAGR) of approximately 9%. By offering a scalable, advanced, and readily available solution, REE and BorgWarner are positioning themselves to capture a significant portion of this burgeoning market.

For REE Automotive, this partnership could be a watershed moment, transforming it from a niche technology developer into a key supplier for the global automotive industry. The company has already achieved a significant milestone by being the first to receive U.S. federal safety certification (FMVSS) for a vehicle fully controlled by-wire. This MOU with a Tier 1 powerhouse like BorgWarner provides a tangible commercialization path for that certified technology.

While this specific agreement with Cascadia Motion remains a non-binding MOU pending definitive agreements, REE has demonstrated its ability to convert such preliminary deals into concrete contracts. The company recently announced the finalization of a separate MOU into a binding agreement to develop an autonomous shuttle, a deal potentially worth over $100 million. Success in finalizing the Cascadia Motion partnership would further solidify REE's financial footing and its strategic importance in the EV supply chain.

The collaboration also extends beyond the initial EDU product. The companies plan to evaluate market demand for complete SDV solutions, including standalone REEcorner units and REE’s proprietary software and zonal architecture. This suggests a long-term vision where OEMs could license not just a component, but an entire foundational platform for building next-generation electric and autonomous vehicles, significantly simplifying complexity and accelerating their own product roadmaps. This modular approach is designed to future-proof vehicle programs, allowing them to adapt and improve continuously throughout their lifespan.