The Tumultuous Journey of Mullen Automotive: Stock Volatility, Strategic Partnerships, and Market Challenges

Mullen Automotive, Inc., a Nasdaq-listed electric vehicle (EV) manufacturer, has been on a roller-coaster ride, experiencing significant stock volatility and strategic shifts. The company recently underwent a 1-for-100 reverse stock split, a move that saw its shares trading on a post-reverse split basis. However, the market’s reaction was far from favorable as the stock plummeted more than 11% on the same day. According to data from Benzinga Pro, Mullen Automotive’s shares have dropped a staggering 61% over the past month, painting a grim picture for investors who had hoped for a turnaround.

Despite the stock’s dismal performance, Mullen Automotive has made notable strides in expanding its commercial EV dealer network. The company announced the addition of Papé Kenworth, a full-service dealer with a significant presence in nine states, including over 150 locations and 1,500 technicians. CEO and Chairman David Michery lauded Papé Kenworth for their extensive experience and reach in the commercial vehicle market, emphasizing that this partnership is expected to play a crucial role in introducing Mullen’s commercial EVs to a broader audience.

The partnership with Papé Kenworth aligns with Mullen’s commitment to making their innovative electric vehicles widely accessible. Papé Kenworth is renowned for offering a variety of transportation solutions to meet customer needs, and their focus on sustainability makes them an ideal partner for Mullen. This collaboration will enable customers of Papé Kenworth to purchase Mullen’s full line of commercial electric vehicles, thereby expanding Mullen’s reach in the commercial EV market and providing Papé Kenworth’s customers with more eco-friendly transportation options.

Mullen Automotive operates in the consumer discretionary sector, making it possible for investors to track its performance through an ETF. ETFs typically hold shares in multiple liquid and large companies within the sector, providing exposure to its trends. As of the latest trading session, Mullen Automotive’s shares were down 11%, trading at $10.48 per share. Investors can access insights and alerts from analyst ratings, free reports, and breaking news through platforms like Benzinga Pro, which can help them trade confidently and keep track of stocks that affect their portfolio.

The company’s volatile performance on the stock market is partly attributed to its recent reverse stock split and the addition of new dealer partners. These developments mark significant steps in Mullen’s goal to become a leader in the commercial EV market. Papé Kenworth’s strong presence and expertise in commercial vehicles make them a valuable partner for Mullen, potentially accelerating the adoption of electric vehicles in the commercial sector.

Mullen Automotive’s shares have experienced significant fluctuations over the past month, suggesting a highly dynamic market for the company. The stock was even halted for volatility to the upside at one point but has since reversed and is trading lower. This erratic behavior underscores the challenges and opportunities that lie ahead for Mullen Automotive as it navigates a rapidly evolving market landscape.

In addition to its partnership with Papé Kenworth, Mullen Automotive has also expanded its dealer network to include other reputable names such as Pritchard EV, National Auto Fleet Group, Ziegler Truck Group, and Range Truck Group. These additions provide sales and service coverage in key Midwest, West Coast, and Pacific Northwest markets, further solidifying Mullen’s presence in the commercial EV sector.

Mullen’s production of commercial vehicles began in August 2023 at its facility in Tunica, Mississippi. The company received IRS approval for federal EV tax credits in September 2023, adding another layer of appeal for potential buyers. The Mullen One and Mullen Three, a class 1 EV cargo van and class 3 EV cab chassis truck, respectively, are both California Air Resource Board (CARB) and EPA certified, ensuring they meet stringent environmental standards.

In January 2024, both the Mullen One and Mullen Three became available for sale in the United States. CARB has also approved the Mullen Three for its Hybrid and Zero-Emissions Truck and Bus Voucher Incentive Project (HVIP), offering a cash voucher of up to $45,000 at the time of purchase. This incentive is expected to drive significant interest and adoption of Mullen’s commercial EVs, providing a much-needed boost to the company’s sales figures.

Despite these positive developments, Mullen Automotive is not without its challenges. The company has been burning through cash quickly, raising concerns about its liquidity. Its financial metrics reveal negative profit margins and operating income, highlighting the difficulties it faces in achieving profitability. The stock’s performance has been underwhelming, with a 1-month total return of -62.15% and a 1-year total return of -99.66%, painting a bleak picture for long-term investors.

To finance its operations, Mullen Automotive has issued over 13 million shares to Esousa Holdings LLC and over 3 million shares to Silverback Capital Corporation. While this influx of capital may provide some short-term relief, the company’s long-term viability remains in question. Production of the Bollinger B4, another key vehicle in Mullen’s lineup, is scheduled to begin in September 2024, with customer deliveries expected to start the following month. Investors will be closely monitoring these developments to gauge the company’s future prospects.

Mullen Automotive’s journey is a testament to the complexities and challenges of the EV market. While the company has made significant strides in expanding its dealer network and securing key partnerships, its financial struggles and stock volatility cannot be ignored. As Mullen continues to navigate this tumultuous landscape, investors and industry watchers alike will be keenly observing its strategic moves and market performance. Only time will tell whether Mullen Automotive can overcome its current hurdles and emerge as a leader in the commercial EV market.