In February, EV company REE Automotive Ltd. announced it will come public via a merger with SPAC 10X Capital Venture Acquisition Corp (NASDAQ: VCVC). Today, the company received its first analyst rating - a 'Buy' - ahead of the merger vote scheduled for 7/21.

DA Davidson initiated coverage on REE Auto/10x Capital Venture Acquisition will a Buy rating and $15 price target.

REE Auto is a next-gen electric mobility company, currently developing completely flat EV platforms. The platforms are scalable and modular, providing customers full design freedom.

According to DA Davidson analyst, Michael Shlisky, the early projections suggest that REE's offering can save the customer up to 49% in total cost compared to a diesel truck, and 19% compared to a current-generation EV. Companies such as Mahindra and Toyota/Hino are currently in a variety of stages with REE. Shlisky believes that more large partnerships are on the way.

At the $10 de-SPAC price, investors can get a piece of what DA Davidson believes could be a global EV leader for approximately 1.5x semi-mature sales, vs. 2.6x for the peer group. Shlisky notes that this may not happen until 2024, but REE Auto's 2026 forecast is nearly 4x that of 2024.

“Overall, we believe REE is developing the next generation of EV trucks, via a shared platform that all can use. REE's EV platform provides a low-cost, highly-adaptable set of underpinnings that can fit nearly any Class 1-6 use case and can be shared inexpensively across global vehicle makers," Shlisky commented.

By Michael Elkins | Michael.Elkins@streetinsider.com