  We consider generalized Scherk-Schwarz reductions of E$_9$ exceptional field
theory to D=2 space-time dimensions and in particular construct the resulting
scalar potential of all gauged supergravities that can be obtained in this way.
This provides the first general expression for a multitude of theories with an
interesting structure of vacua, covering potentially many new AdS$_2$ cases. As
an application, we prove the consistency of the truncation of
eleven-dimensional supergravity on $S^8\times S^1$ to SO(9) gauged maximal
supergravity. Fluctuations around its supersymmetric SO(9)-invariant vacuum
describe holographically the dynamics of interacting D0-branes.
