Longtime drivetrain supplier American Axle & Manufacturing and Israel's REE Automotive said Friday they plan to jointly develop an electric propulsion system to tap accelerating demand for battery-powered vehicles.
The propulsion system will incorporate American Axle's electric drive units into Ree's technology that integrates all the traditional vehicle chassis components into the arch of the wheel.
The electric drive units will be developed by American Axle in Detroit and prototypes will be delivered by the end of the year. Further terms of the deal were not disclosed.
"This agreement to provide electric drive technology ... is an important step in growing AAM's electric propulsion business," said American Axle CEO David Dauch.
Earlier this year, REE agreed to go public through a merger with blank-check company 10X Capital Venture Acquisition Corp. in a deal that valued the EV technology startup at around $3.6 billion.
Investors in the transaction included India's Mahindra & Mahindra and Canadian auto supplier Magna International Inc.
Separately, American Axle said it will receive $5 million in funding from the U.S. Department of Energy to advance the development of its electric drive technology.