REE Automotive has entered into a non-binding memorandum of understanding with Cascadia Motion, a BorgWarner subsidiary, to jointly develop, manufacture and commercialize a next-generation electric drive unit (EDU). The EDU will integrate Cascadia Motion’s iM-125 motor-inverter module with REE’s proprietary REEcorner in-wheel technology. Under this phased collaboration, REE will grant an exclusive, time-limited distribution right to Cascadia Motion and receive royalties on each EDU sold. The partners will leverage REE’s existing assembly line, tooling and supplier network to support initial production runs, subject to definitive commercial agreements.

The co-developed EDU is designed to be compact and cross-platform, delivering up to 100 kW of peak power and sustained torque of 2,150 Nm at the wheel flange through a 19.17:1 gearbox. Operating at 400 volts with water-glycol cooling at 8 L/min, the unit targets ASIL-D functional safety and supports secure over-the-air updates when paired with REE’s zonal vehicle control units. At just 54 kg per corner, the system is optimized for commercial vehicle designs seeking low chassis height and modular electrification.

Industry forecasts project the global EDU market to grow at a compound annual growth rate of approximately 9% through 2035, effectively doubling in size by the end of the decade. REE and Cascadia Motion aim to capture a significant share of this market by offering off-the-shelf EDU modules tailored to global OEM electrification programs. The MOU also outlines a roadmap to evaluate full software-defined vehicle (SDV) solutions, combining REE’s zonal architecture and software stack with Cascadia Motion’s propulsion technology to accelerate OEM time-to-market for next-generation electric and by-wire vehicles.

Following the announcement, REE Automotive shares rose 4.64% in premarket trading, reflecting investor enthusiasm for the expanded product portfolio and scalable commercialization pathway. Management highlighted that this strategic tie-up builds upon REE’s recent evaluation program with Mitsubishi Fuso, which demonstrated the versatility of its SDV architecture in converting a commercial eCanter truck. Looking ahead, REE expects to finalize definitive agreements in Q2 2026, with pilot production of the integrated EDU slated for late 2026 and full commercial shipments commencing in 2027.