Mullen Automotive Faces Stock Dip Despite Production of EPA-Approved EV Van
Mullen Automotive Faces Stock Dip
Mullen Automotive (NASDAQ:) experienced a 7% drop in its stock after initiating production of its EPA-approved Mullen One, a Class 1 electric vehicle (EV) van, on Tuesday. Despite this setback, the stock has remained above the 9-day simple moving average for several sessions amidst mixed market conditions.
EPA Approval and Contract Details
The EPA’s Certificate of Conformity allows Mullen to ship the Mullen ONE to customers and distributors. Randy Marion Automotive has secured a $200 million contract for 6,000 units in 2022, with plans to deliver 300 vehicles by year-end and an additional 6,000 in 2024. The Mullen ONE, with a starting manufacturer’s suggested retail price (MSRP) of $34,500, holds a larger initial wholesale contract than the Mullen THREE, which has been in production since August and has a $63 million purchase order for 1,000 units from Randy Marion Automotive.
US Tax Credit and Regulatory Compliance
The Mullen ONE qualifies for a $7,500 federal US tax credit, effectively reducing the full price to $27,000. However, Mullen is currently in a blackout period until it submits its 10-K filing with the Securities and Exchange Commission (SEC) on December 29. A shareholder meeting is scheduled for December 15 to vote on a third reverse stock split plan aimed at maintaining its NASDAQ listing.
Mullen Automotive’s Background and Future Plans
Mullen Automotive, founded by CEO David Michery in 2014, went public through a reverse merger in late 2021. The company has been diluting its stock due to limited operational revenue and lack of profits, significantly affecting the share price. Mullen holds a 60% stake in Bollinger Motors and plans to manufacture the Mullen FIVE EV crossover by late 2024 or early 2025. The company recently extended its $25 million buyback program by six months and enacted a 1-for-25 reverse stock split on May 4, 2023. Reservations for the Mullen FIVE are already being taken, with the supportive structure from October providing some support for traders.
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