EV Sector Weakness Exposes Opportunity, Here’s Why Mullen Automotive Is One ($MULN)

October 21 06:14 2022
EV Sector Weakness Exposes Opportunity, Here's Why Mullen Automotive Is One ($MULN)

Mullen Automotive (NASDAQ: MULN) wants to help change the EV landscape. And that includes vehicle manufacturing, corporate governance, and everything in between. Now, with all the headlines about “green energy” and “eco-friendly initiatives,” most people would think that all companies in the sector EV and clean-energy sector practice what they preach. The reality is that many don’t. Not necessarily by original intent but because of lacking the infrastructure needed to bring safe, reliable, and eco-friendly products to market. Publicly-traded Mullen Automotive, Inc. is taking a different approach and, most importantly, has the means, management, mantra, and ability to bring excellent products to market in an expedited fashion.  

As important as integrity-based manufacturing, Mullen’s EV and clean energy solutions are committed to another set of principles, which ensure its products and services are produced and marketed in an environmentally friendly, socially responsible, and ethically governed way. Still, while being socially conscious is a valuable corporate trait, investors want to see value on the financial side. And MULN is also working hard to deliver there by developing EV and clean energy solutions that are scalable, efficient, economical, easy to own, and simple to operate.

All tolled, those distinctions are more than industry differentiators; they’re advantages. And they combine to help expedite MULN’s mission to grow bigger faster.

Video Link: https://www.youtube.com/embed/zHWJfzvX3uM

Unrecognized Intrinsic And Inherent Value

Yes, MULN’s share price is getting squeezed lower. But so are those of most EV sector players. But as savvy investors know, share prices are imperfect representations and are significantly influenced by other factors beyond company fundamentals. Short sellers are a big part of that dynamic and generally bet against the company’s valuation, not necessarily its intent. In MULN’s case, they may have overshot an appropriate target, noting that MULN appears to be getting stronger, not weaker, in its ability to earn a competitive share of a booming EV market. 

Thus, market recovery, short-covering, rotation back into EV stocks, and updates from MULN on several value-adding initiatives could quickly change MULN investors’ fortunes. And with its best-in-class product lineup steered by an executive management team with extensive EV, OEM, and startup experience, that’s a likely proposition. In fact, factoring in the team’s over 18 years of battery modeling, algorithm development, and robust engineering in battery management systems (BMS), it’s probable. 

Having the ability to leverage expertise matters. Moreover, it’s timely as EV demand continues to surge and shows no signs of slowing. And that demand goes well beyond passenger vehicles. Commercial fleet vehicle demand is also soaring, evidenced by interest in EV vehicles from last-mile delivery services companies, a market forecasted to grow by 78% by this decade’s end. The excellent news from a MULN investor’s perspective is that the company targets both opportunities and, more importantly, has the assets needed to earn its share of that multi-billion dollar market prize. But MULN isn’t a pure electric vehicle play. They are also working to capitalize on and maximize its opportunities in the EV battery space, tapping into considerable revenue-generating opportunities from intensifying global urgency to find and utilize renewable energy resource solutions. 

And by being quick to market, enjoying lower capital investment than other EV startups, having excellent products, and leveraging US-based manufacturing and operations, Mullen can price its products aggressively with an inherent ability to quickly change strategies as markets change. That’s their intent.

Pun Intended, Mullen Is Ready To Surge 

They have an excellent start. And if all goes according to plan, Mullen will do more than disrupt the EV landscape positively; its end-to-end ecosystem will make “going electric” more accessible than ever. With millions of private and public-sector consumers wanting the types of products Mullen sells, that matters. And meeting just its near-term objectives from that population, MULN, pun intended, could surge. They certainly have the products to make that happen. 

Its Mullen FIVE, a strikingly different premium midsized electric-powered sport utility vehicle, is an excellent example. Stunningly designed, engineered, and manufactured entirely in the USA, its timeless styling and intuitive functionality are indeed attracting consumer attention. But that’s not the only reason why. It’s also fast, going from zero to sixty in 3.2 seconds, positioning it competitively in its class. Beyond styling and speed, the FIVE is 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. Those features combine to keep consumer opinions high, with scores placing MULN products among the best in the space and earning appreciable respect compared to Ford’s Mach E (NYSE: F), General Motors (NYSE: GM) contributions, the Toyota (NYSE: TM) bZ4X, and the Tesla Model Y (NASDAQ: TSLA). The first fully functional demonstrator vehicles of the Mullen FIVE EV Crossover will begin arriving this October. That’s still just a small part of the MULN consideration.

Beyond FIVE’s launch, MULN plans to bring its Mullen RS to market in Spring 2023. They also are planning to soon launch its lineup of commercial fleet vehicles targeting all scales of delivery to seize what they expect can be a significant share of the last-mile delivery vehicle market. Its controlling interest in Bollinger Motors positions them ideally to capture a share in that market as one of the few offering electric chassis cabs and platforms in several vehicle classes, including off-road designs. The combined strength with Bollinger immediately moves MULN into the medium-duty truck classes 3-6, along with the B1 and B2 sport utility trucks.

But, as noted, Mullen isn’t all about vehicles. They are also working intensively on developing innovative polymer solid-state battery cell technology.

A Better Battery In The Works

Advancing through the prototype stage, MULN is working to improve electric battery solutions by replacing the liquid electrolyte currently used in lithium-ion EV batteries. They intend to show that swapping the liquid for a solid-state alternative will significantly improve performance, power, and safety. It’s a multi-billion, longer-term trillion-dollar market opportunity where best-in-class can earn the lion’s share of rewards. Mullen emphasized how solid-state batteries offered higher energy density, faster charging time, smaller size, and safety compared to traditional lithium-ion cells. Based on MULN’s technology, it’s an opportunity that should not be missing from its valuation appraisal.

Neither should the value of partnerships. MULN has several, including Hofer Powertrain and DSA, to facilitate the manufacturing of components for its electric drive systems and remote OTA capabilities. The company is also supported by ARRK, which provides computer-aided engineering, body in white, battery, closures, interior, chassis, thermal, and infotainment engineering for its EV lineup. There’s more.

Mullen and automation company Comau joined forces to develop a state-of-the-art body shop and is also working with Dürr, supporting assembly and paint shop technologies. They all connect 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. Near-term expansion plans include integrating general assembly and test track infrastructure. 

Notably, MULN said it’s in the market to acquire an additional factory for Mullen FIVE production and various new programs, which, if consummated, could accelerate the entirety of the MULN growth initiative and enhance the value proposition.

A Customer-Friendly Infrastructure

Of course, great products and services are only parts of an excellent company. They also need to focus on the most critical aspect of their business- customers. Mullen is. In addition to those design and performance features mentioned, MULN is developing a robust supporting infrastructure to increase its competitive position.

That includes its Lounge Point retail locations that will feature total vehicle sales and service interaction, including test drives, reservations, purchases, trade-ins, finance, insurance, and vehicle delivery. By the way, those locations will be well integrated into everyday life, rather than an auto dealer row approach off highways. Thirty-two Lounge Point locations are planned across the US, with additional Service Points near those locations and further supported by mobile service technicians available for off-site vehicle repair and service.

Combining products, services, technology, and strategy with its infrastructure makes the Mullen proposition attractive on many levels. And while the industry looks crowded with aspiring players, it’s fair to say that some companies, Mullen included, are successfully separating themselves from a field where substance matters more than conceptual ambition.

An EV Company That Can Surge

MULN’s substance exposes a company in motion and one that can surge. Yes, the sector has been weak. But, market weakness reveals opportunities, and based on the sum of its parts, Mullen Automotive is one. And not only because its stock will likely rise with sector momentum or that a significant short position could be squeezed but because they are doing the right things to create, build, and sustain value. Its Mullen FIVE Crossover, commercial fleet vehicles to serve a massive last-mile delivery industry, and solutions to the growing urgency surrounding sustainability all contribute to that proposition.

Hence, at current values, is Mullen Automotive a company and stock too good to ignore? After earning impressive media coverage and consumer interest from the LA Auto Show, supported by products, infrastructure, assets, and a strategy to grow bigger faster, many say yes. Those answering in the affirmative from an investor’s perspective may add another point to the MULN value proposition; it’s a timely consideration.


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