REE Automotive Ltd. (NASDAQ: REE) and Cascadia Motion, LLC—a wholly owned subsidiary of BorgWarner Inc.—have entered into a non‑binding memorandum of understanding to jointly develop and commercialize a next‑generation electric drive unit (EDU). The collaboration will combine REE’s REEcorner module, which integrates steering, braking, suspension, powertrain, and control into a single wheel‑mounted unit, with Cascadia Motion’s iM‑125 motor‑inverter package. The result is a compact, fully by‑wire drive module that can be dropped into a variety of commercial and passenger vehicle platforms while meeting the highest functional‑safety standard, ASIL‑D.
Under the MOU, REE will grant Cascadia Motion access to its existing EDU assembly line, tooling, inventory, and supplier network, enabling the partner to scale production of the integrated unit. Cascadia Motion will receive an exclusive, time‑limited distribution option and a royalty‑bearing arrangement, giving it a first‑mover advantage in the rapidly expanding EDU market. The partnership also provides Cascadia Motion with REE’s OTA update capabilities and advanced control architecture, positioning the joint product as a plug‑and‑play solution that can accelerate OEM electrification programs.
The deal is a key milestone in REE’s strategic pivot away from capital‑intensive manufacturing toward a licensing‑focused business model. In 2025, REE announced significant cost‑reduction measures and workforce reductions to shore up its balance sheet, and the company has been actively seeking partners that can bring its software‑defined vehicle (SDV) technology to market. By leveraging BorgWarner’s manufacturing footprint, REE can validate its technology, generate recurring royalty revenue, and reduce its own capital outlays, thereby improving financial resilience amid a challenging macro environment.
Cascadia Motion, formed in 2019 through the merger of Rinehart Motion Systems and AM Racing, has built a reputation for niche electric and hybrid propulsion solutions. The iM‑125 unit is designed for space‑constrained applications, and its integration with REEcorner’s control stack will broaden Cascadia Motion’s product portfolio. The partnership taps into an EDU market projected to grow at a 9% CAGR from 2025 to 2035, a growth rate that could more than double the market size by 2035. The joint offering is expected to appeal to OEMs seeking a modular, high‑performance drive unit that can be rapidly deployed across multiple vehicle architectures.
Management emphasized the strategic fit of the collaboration. REE CEO Daniel Barel said the MOU “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.” Cascadia Motion’s General Manager Joseph McHenry added, “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.”
The partnership positions both companies to capture a share of the high‑growth EDU market while aligning with broader industry trends toward modular, software‑driven vehicle architectures. For REE, the deal signals a decisive step toward a less capital‑intensive model, potentially improving long‑term profitability and financial stability. For Cascadia Motion, the collaboration expands its technology base and strengthens its competitive positioning within BorgWarner’s global propulsion portfolio.
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