Following the initiation of production for its Environmental Protection Agency (EPA)-approved Mullen One, a Class 1 electric vehicle (EV) van, Mullen Automotive (NASDAQ:MULN) saw a 7% drop in its stock on Tuesday. Despite this, the stock has remained above the 9-day simple moving average for several sessions amidst mixed market conditions.
The EPA's Certificate of Conformity allows Mullen to ship the Mullen ONE to customers and distributors. Randy Marion Automotive has agreed to 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. The latter has been in production since August and holds a $63 million purchase order for 1,000 units from Randy Marion Automotive.
The Mullen ONE also 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 was founded by CEO David Michery in 2014 and 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, which has significantly affected 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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