BREA, Calif. - Mullen Automotive, Inc. (NASDAQ:MULN), an emerging electric vehicle (EV) manufacturer, has inked a purchase agreement with Volt Mobility, a prominent UAE-based commercial leasing company. Under the deal, Mullen will supply Volt with 3,000 EV cargo vans and trucks, valued at approximately $210 million, to be delivered over the next 16 months.
The agreement stipulates an initial deposit of $3 million from Volt within 60 days, with further payments to be made as the vehicles are delivered. Mullen has confirmed that shipping of the first vehicles will commence immediately. The company anticipates recognizing the revenue from this deal within the specified 16-month period.
Volt Mobility, which serves major clients such as UPS, DHL, and FedEx (NYSE:FDX) in the Gulf Cooperation Council (GCC) region, plans to lease these vehicles to its corporate customers. The order includes Mullen ONE Class 1 EV cargo vans and Mullen THREE Class 3 EV cab chassis trucks, which will be assembled at Mullen’s Commercial Vehicle Facility in Tunica, Mississippi.
This facility boasts an annual production capacity of 20,000 Class 1 and 6,000 Class 3 vehicles across two production shifts. The move aligns with the UAE's push for e-mobility and its long-term strategies aimed at achieving net-zero carbon emissions and 100% clean energy by 2050.
Sophia Nau, managing director and CFO for Volt Mobility, emphasized the company's role in setting transportation trends and leading the transformation to sustainable and efficient transportation. David Michery, CEO and chairman of Mullen Automotive, highlighted the significance of the agreement for Mullen's exposure to global transportation markets and the utilization of Mullen EVs in the Middle East.
The Mullen commercial EV lineup is designed to meet urban last-mile delivery demands and adheres to U.S. Federal Motor Vehicle Safety Standards, EPA, and California Air Resources Board certifications. The Bollinger B4, part of Mullen’s subsidiary Bollinger Motors, is scheduled to start production on September 16, 2024, with deliveries beginning in October 2024.
This partnership is based on a press release statement and comes at a time when Mullen has been expanding its commercial vehicle production and dealer network in the United States, as well as receiving federal EV tax credits and California HVIP approval for its vehicles.
In other recent news, Mullen Automotive's subsidiary, Bollinger Motors, has set a production date for the Bollinger B4, a Class 4 electric commercial truck. The production, in collaboration with Roush Industries, is scheduled to commence on September 16, 2024, with the first units expected to be delivered in October 2024. The B4 Chassis Cab has secured significant sales orders from customers nationwide, including fleet sales to companies like Doering Fleet Management and Momentum Group.
Bollinger Motors has also qualified for federal clean vehicle tax credits under the Inflation Reduction Act, providing a $40,000 incentive per B4 chassis cab vehicle. Moreover, Mullen Automotive has recently completed a delivery of their Mullen ONE, Class 1 EV cargo vans to the University of Virginia and sold a Mullen THREE truck to Princeton University, marking its growing presence in the higher education sector.
In other developments, Mullen Automotive has expanded its dealership network through its Boston-area dealer, Eco Auto, which has committed to purchasing 180 vehicles. The company has also secured new financing commitments of $250 million. These developments are part of recent progress made by Mullen Automotive in the electric vehicle market.
InvestingPro Insights
Mullen Automotive's recent deal with Volt Mobility has brought the company into the limelight and may signal a turning point for its commercial prospects. However, looking at the financial health and stock performance of Mullen Automotive through InvestingPro's lens offers a more nuanced picture. With a market capitalization of just $15.94 million, Mullen's financial standing is modest in the burgeoning EV industry. The company's Price / Book multiple, standing at 0.39 as of Q3 2024, suggests that the stock may be undervalued relative to its assets, which could attract value investors.
Despite the potential promise of the deal with Volt Mobility, InvestingPro Tips indicate that Mullen faces significant challenges. The company is quickly burning through cash and has short term obligations exceeding its liquid assets, which raises concerns about its ability to sustain operations without additional financing. Additionally, the stock has experienced a significant return of 33.93% over the last week, yet this follows a steep year-to-date price total return of -97.65%, highlighting the stock's high volatility and the risks involved for investors. For those interested in a deeper dive into Mullen's financial and stock performance, InvestingPro offers 18 additional tips, providing comprehensive insights for informed decision-making.
As Mullen Automotive continues to navigate the competitive EV space, these financial metrics and InvestingPro Tips will be crucial for investors to monitor the company's ability to leverage new opportunities and overcome its financial hurdles. For further details and tips on Mullen Automotive, visit InvestingPro.
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