Mullen Automotive Is Ready To Get In Gear

Key Points

• Mullen Automotive has caught the attention of investors.
• The company is an EV start-up focused on improving efficiency and battery technology.
• The FIVE SUV Crossover should begin deliveries in 2023.

Mullen Automotive (NASDAQ: MULN) is gearing up for production of its flagship FIVE SUV crossover which could be the next big thing in the EV world. Its cars are not only attractive but fast and it has its fingers in more than one market including sports cars, final mile delivery, and battery technology. The caveat is that all too many EV start-ups have been in this position over the past few years and very few of them are making cars today. While the car aspect of the business is attractive from the speculative viewpoint, it is the advancements in battery technology that could be the ticket to this company’s success. 

Mullen Automotive is focused on improving EV range by increasing efficiency as well as advancing battery technology. Among its avenues of pursuit are lithium-sulfur and solid-state batteries and both would equal lighter batteries with increased energy density. Among the benefits of the lithium-sulfur battery are 5X more energy density, 50% less cost per watt-hour, and sustainability. Mullen is predicting that its car, when upgraded to the new technology, would have twice the average range of EV cars on the road today. Other benefits include a lower cost to manufacture and environmentally-friendly materials. In terms of cost, lithium-sulfur batteries could be as much as 50% cheaper to manufacture than today’s standard. 

Mullen Goes On Acquisition Spree 

An acquisition spree can be a red flag for a company with no revenue but, in the case of Mullen Automotive, the company is well capitalized and working to solidify its position in the market. The two acquisitions made since the summer include ailing EV truck-maker Bollinger Motors and a bid for Electric Last Mile (NASDAQ: ELMSW) which filed for bankruptcy. Bollinger is an innovator in the EV truck industry and brings several models in class 3-6 range as well as two sport utility trucks, the B1 and B2. The acquisition cost the company $168 million in cash and stock and gives Mullen a 60% controlling interest in the company. The cash will be used by Bollinger to revive the B1 and B2 programs which had been put on hold in favor of advancing commercial truck technology. 

Mullen revealed a stalking-horse bid for Electric Last Mile that is waiting on approval to move forward. The $92 million bid is for Electric Last Mile’s assets and intellectual property including plans related to the urban final-mile delivery truck, Urban Delivery. Among the assets are a production facility in Indiana, inventory, and supply-chain information. Electric Last Mile had been a publicly traded company for less than a year at the time of the chapter 7 filing. 

Insiders Sell, Institutions Buy Mullen Automotive 

The insiders are selling their shares of Mullen Automotive but the sales are nothing for investors to worry about yet. The insiders, including private equity and venture capital firms, own more than 30% of the shares and are only selling in dribs and drabs. Selling over the past year is equal to 1.7% of the market cap with the shares trading at $0.335 and that is offset by institutional buying. The institutions are not big holders of the stock but have begun to pick up shares. Their buying over the past year is worth about 1.6% of the market cap and has their holding up to a whopping 6.6%. 

The Technical Outlook: Mullen Is A Cheap Gamble 

An investment in Mullen Automotive is speculation on production and battery technology that may not pay off. While production is late to begin soon, the company has been in this position before and yet here we are today. The same is true for battery technology. While the company’s efforts are producing results lithium-sulfur technology, along with other battery advancements, is being worked on by all the top battery companies (including Tesla (NASDAQ: TSLA) and Elon Musk, so beware) and may never become commercially viable. That said, trading at only $0.33 per share, it isn’t hard to pick up a chunk of the stock for cheap just in case it is THE answer to the EV market.