Weakness in Mullen Automotive stock may be an opportunity too good to ignore. In fact, after giving back a significant part of its over 177% October rally, share prices look irresistibly low considering the accretive deals made by the company in the past few weeks. At least four updates electrified the investor community, generating significant investor interest and sparking a sharp rise in MULN valuations. But, despite the excellent updates, market gravity pulled part of that surge lower. Of course, for investors considering the MULN proposition, that’s not necessarily bad news. They can add to or create a position at better prices.
Investors may want to act on that consideration sooner than later. That’s because, from a fundamental and operational perspective, MULN is hitting its operational stride. In fact, its potentially transformative acquisition of new assets, a significant decrease in debt, exclusive licensing to market the I-GO last-mile EV in European markets, and strong interest and demand for its FIVE EV Crossover put MULN in its best position ever to create sustainable shareholder value.
An analyst covering MULN is indeed bullish on that proposition, offering a 12-month price target for Mullen Automotive of 23.00, with a high estimate of 23.00 and a low estimate of 23.00, with the median estimate representing a +7,709.85% increase from the last price of 0.29.
Supporting The Bullish Proposition
There’s plenty to support that bullish forecast. And more was added after MULN announced eliminating $13 million in company debt, a reduction leaving them with less than $10 million in debt on the books. That’s a sharp decline from the $30 million indebtedness in 2021.
But more than just a 66% reduction in outstanding debt, the better news is that MULN could soon be a debt-free company. If they can stay true to that mission, that could feasibly happen by the end of next year or sooner. For an emerging EV sector player with several products hitting the pavement and development programs in the late stages, it’s a distinction that does more than attract investor interest; it could also send short sellers for cover.
They may want to do so. The accretive updates announced over the past few weeks should positively affect income going forward. And with a well-managed and ambitious company starting to do the right things at the right time, more than just accruing new revenues, they can harness the value inherent to recent deals. All tolled, MULN could transform into an even more impressive EV sector player.
A Big Deal With I-GO
That’s already happening. And from an intrinsic perspective alone, plenty supports higher MULN share prices. In fact, a deal made last month adds appreciably to a strengthening product portfolio, with the value from that deal still disconnected from current prices. That one can be a game-changing asset for the company.
Investors were certainly excited; they sent shares higher by over 77% after MULN announced acquiring exclusive sales and marketing rights to sell the I-GO in particular European markets. Considering that the I-GO is described as a “perfect” electric vehicle for urban European markets and knowing that the MULN team is capable of tapping into its value, giving back gains may be leaving considerable value on the table, especially with the I-GO expected to fill a substantial niche last-mile services opportunity in those markets. But here’s more good news.
On Wednesday, MULN announced an agreement to appoint Newgate Motor Group, one of Ireland’s most recognized dealership groups, as the marketing, sales, distribution, and servicing agent for the Mullen I-GO in Ireland and the United Kingdom, a deal expected to expedite sales into those massive market channels and immediately strengthen the I-GO value proposition. Based on its specs, the I-GO is predicted to serve considerable demand.
Boasting a short but powerful 96-inch wheelbase, 16.5-kWh battery pack, rear-wheel drive, a curb weight of only 1,753 lbs., an NEDC estimated range of 124 miles per charge, and its ability to easily handle the stop/go and weave in/out typical of narrow European urban streets has made the I-GO a polling favorite as the vehicle choice for both last-mile delivery companies and consumers wanting convenience and value. That’s no surprise. The I-GO was specifically built to meet known market needs, designed to get to the customer’s door faster and provide affordable in-town EV options while decreasing pollution and congestion levels across Europe.
It’s attractively priced, too. The I-GO will have a starting price of only $11,999 plus taxes and fees and will be retailed and serviced through supporting local European distributors. Investors in MULN should appreciate the value this deal can deliver. Short sellers, not so much. They may even be willing to admit that the acquisition is a significant win for MULN, an inducement to cover positions. Hence, this decline, in the face of an invigorated sector rally led by sector giants Tesla (NASDAQ: TSLA), General Motors (NYSE: GM), and Ford (NYSE: F), may be short-lived.
Enhanced Revenue-Generating Opportunities
There’s plenty more revenue-generating firepower supporting the bullish sentiment. In addition to I-GO providing MULN with potentially massive new market opportunities, it also extends its brand into other countries while simultaneously allowing them to remain focused on its mission of manufacturing its lineup of impressive EVs in the USA. Those include MULN’s current commercial vehicle lineup comprised of Class 1 and 2 EV cargo vans, Class 3 through Class 6 vehicles resulting from its majority acquisition of Bollinger Motors, and its Mullen FIVE series.
By the way, in addition to securing the exclusive sales, distribution, and branding rights for the I-GO in Spain, France, Germany, the UK, and Ireland, MULN said it also entered into an Asset Purchase Agreement to acquire all assets of Electric Last Mile Solutions, Inc. and Electric Last Mile, Inc. (“ELMS”) from the ELMS Bankruptcy Estates. That deal can also considerably extend MULN’s marketing and sales reach.
If so, it will be the start of transforming milestones into catalysts, and MULN scoring several in the past month alone positions the company for a near-term, news-based breakout.
Capitalizing On Near Term Market Opportunities
That’s more than likely; it’s probable. Paying attention to just those few updates made in October, MULN went from a medium to long-term play to a near-term and compelling value proposition. And recent weakness underscores the opportunity and further exposes a valuation disconnect between share price, portfolio assets, and inherent potential. But as noted, that’s not altogether bad news; valuation disconnects reveal investment opportunities, and this recent decline may offer one too good to ignore.
Remember, while there are several smallcap EV companies to choose from, others don’t seem to hold the revenue-generating firepower inherent to MULN. Nor have others created an end-to-end ecosystem making “going electric” more accessible than ever. And considering that millions of private-sector companies and public-sector consumers want the types of products Mullen sells and plans to sell, and fortified with an overseas presence, MULN also looks better positioned from a market perspective to monetize its initiatives sooner than its peers.
No surprise, there. Its products are “strikingly different,” generating a lot of interest. Its Mullen FIVE EV product family is indeed a welcomed addition to the premium midsized electric-powered sport utility vehicle market. But it has more than great looks. In addition to what’s been described as “stunningly designed and engineered,” it’s manufactured entirely in the USA. But that’s only part of its appeal. Its timeless design and intuitive functionality also showcase power, going from zero to sixty in 3.2 seconds, positioning it at or near the top of many categories compared to competing vehicles’ styles and performance. There’s still more to help put the FIVE into a class of its own.
It’s also equipped with modern advancements like facial recognition technology, an integrated LED lighting system, voice command, and PERSONA, a personal vehicle assistant controlled via app managing preferences and security modes. That’s led to consumer opinions overwhelmingly supportive of the car, placing it among the best in the space and earning competitive respect against Ford’s Mach E/F, General Motors EVs, the Toyota bZ4X, and the Tesla Model Y. Those wanting to see it in action won’t wait long. The first fully functional demonstrator vehicles of the Mullen FIVE EV Crossover began arriving this October, and that’s just one vehicle launch in the queue.
More products are expected to roll out soon. MULN plans to bring its Mullen RS to market in Spring 2023, as well as a lineup of commercial fleet vehicles intending to seize a substantial share of the demand for last-mile delivery vehicles. And part of that market, and others, can be exploited through MULN’s controlling interest in Bollinger Motors. That interest positions them ideally to capture share in several markets as one of the few offering electric chassis cabs and platforms in several vehicle classes. It immediately moves MULN into the medium-duty truck classes 3-6, along with the B1 and B2 sport utility trucks. Off-road videos of the Bollinger are impressive as well. So, don’t think the leisure market isn’t in play. It is.
But Mullen isn’t only a vehicle manufacturing company; they are a technology company, too, working intensively on developing innovative polymer solid-state battery cell technology.
Battery Technology Solutions Are A Valuation Wild Card
Advancing through its prototype stage, MULN could be on the verge of finalizing an industry-best design to improve electric battery safety and capability by replacing the liquid electrolyte currently used in lithium-ion EV batteries. Trials intend to show that swapping the liquid for a solid-state alternative will significantly improve performance, power, and safety.
Remember that this current multi-billion dollar battery market opportunity is expected to become a trillion-dollar one as early as 2030. As is often the case, best-in-class products earn the lion’s share of market rewards. Mullen believes its technology could transform its company into one of the lions, and it’s possible. Mullen recently emphasized how its rendition of solid-state batteries offered higher energy density, faster charging time, smaller size, and safety compared to traditional lithium-ion cells. Developing new technologies has led to some partnerships, too.
Mullen is engaged with Hofer Powertrain and DSA to facilitate the manufacturing of components for its electric drive systems and remote OTA capabilities. The company is also working with and supported by ARRK, which provides computer-aided engineering, body in white, battery, closures, interior, chassis, thermal, and infotainment engineering for its EV lineup. They also joined forces with automation company Comau in a strategic alliance to develop a state-of-the-art body shop. That’s not all.
They are also working with Dürr, supporting assembly and paint shop technologies, connecting seamlessly with Mullen’s fully equipped engineering facility in Tunica, Mississippi, which serves as the company’s Advanced Manufacturing Engineering Center and Proving Grounds for manufacturing and engineering efforts. Tapping into the experience of both, near-term expansions at the facility include integrating general assembly and test track infrastructure.
There’s more to like. Value is also expected to accrue from MULN’s desire to acquire an additional factory for Mullen FIVE production and various new programs, which, if consummated, could expedite MULN’s mission to become a significant sector player. With gravity pulling shares lower, the accretive value from all the above appears conspicuously absent from MULN’s valuation.
A Timely And Actionable Proposition
Thus, knowing that valuations in emerging companies on the heels of transformation can change quickly, the MULN proposition is more than timely; it’s actionable. And considering that more accretive news is likely in the queue, taking that action may be better suited for sooner than later consideration. Again, MULN isn’t a hype-based proposition; it’s substance backed.
Undoubtedly, the sum of MULN’s parts is appreciably more potent than a month ago. With enhanced revenue-generating opportunities in its scope, and a team able to seize them, recent weakness simply doesn’t match with MULN’s strengthening fundamentals. Yes, MULN may have scored EV gold when it acquired exclusivity to the I-GO, and reducing debt can be a game-changer to bottom-line performance. But both are just a part of a much bigger developing story.
And the excellent news on that front is that with several updates expected over the next few weeks, a new chapter may be added to an already bullish value proposition. Better yet, it could spell out ways of taking investors closer to a happy ending.
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