Mullen Automotive (NASDAQ: MULN) may be considered a small player in the booming EV and clean energy sector. But make no mistake, this company can change that narrative quickly with products, technology, and management expertise, supporting the premise that $MULN is primed to surge. Yes, pun intended. But kidding aside, even as a microcap EV stock, Mullen has done more to create shareholder value than competitors 10X its size. And while sector weakness and a significant short position may be weighing on MULN shares, once markets embrace risk, Mullen and its investors could be in for a bullish ride.
That's not an overzealous presumption considering that Mullen's EV and clean energy solutions rely on different principles than many in its space. While the intention of most is good, MULN is differentiating itself from the pack, taking good intentions further with a mission to not only manufacture best-in-class products but to do it in an environmentally friendly, socially responsible, and ethically governed way. That's an excellent set of guiding principles. But the ones that will make MULN and its investors money are that Mullen's EV and clean energy solutions are scalable, efficient, economical, easy to own, and simple to operate.
Those distinctions do more than include MULN in an elite class of EV manufacturer; they are advantages helping Mullen earn its share of consumer attention and industry respect.
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Focus On Forward-Looking Potential
Thus, MULN's stock price may be another example of markets getting it wrong. They often do. But in this case, the disconnect may be too wide to ignore, noting that, at best, it's a lagging indicator focused on market dynamics and prior performance instead of what's in play today. And there's quite a bit on that front.
From an investor perspective, few can argue against MULN's ability to earn a sizable dollar share of a coordinated global initiative to reduce greenhouse gas emissions and the resulting carbon footprint. It's an execution story, not a lack of resources one. And in that sense, MULN is well-fortified with a best-in-class product lineup steered by an executive management team with extensive EV, OEM, and startup experience. And that team isn't newbies to the sector; they leverage nearly two decades of battery modeling, algorithm development, and robust engineering in battery management systems (BMS) experience. Considering the modern push to go EV is traced by many to Tesla's 2008 Roadster release, it's fair to say that this team has been involved in the industry since the reboot.
And having that type of team matters when serving soaring EV demand with no signs of a slowdown. And that demand is expanding well beyond passenger vehicles. Commercial fleet vehicle demand is also soaring, with last-mile delivery EV service needs expected to grow by 78% by this decade's end. MULN's focus on both those markets bodes well for its future revenue growth. But it's important to note that MULN isn't only about manufacturing vehicles. They are also working to maximize near-term opportunities in the EV battery space, tapping into massive market opportunities as the urgency to find and utilize renewable energy resource solutions intensifies. Its solid-state polymer battery cell technology puts those markets in Mullen's crosshairs.
And more than targeting focused opportunities, MULN's being quick to market, enjoying lower capital investment than other EV startups, and leveraging US-based manufacturing and operations do another thing; it allows them to create, manufacture, and deliver competitively priced products to market. That's their near-term intent, which, if all goes according to plan, could accrue substantial shareholder value faster than many expect.
Disrupting Is Part Of The Equation
They have an excellent start to doing that. In fact, Mullen may do more than disrupt parts of the EV landscape. Its end-to-end ecosystem could make "going electric" more accessible than ever. And considering that millions of private and public-sector consumers want the types of products Mullen sells and plans to sell, this innovative EV and clean energy company could be positioned to surge. Unlike other microcap EV players, MULN has the assets, products, and infrastructure to make that happen.
On the products side, its Mullen FIVE EV is an excellent example. It's a strikingly different addition to the premium midsized electric-powered sport utility vehicle class that is stunningly designed, engineered, and manufactured entirely in the USA. But that's only part of its appeal. Its timeless design and intuitive functionality also encase power, evidenced by the Five 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. But it offers even more value, 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 (NYSE: F), General Motors (NYSE: GM) EV's, the Toyota (NYSE: TM) bZ4X and the Tesla Model Y (NASDAQ: TSLA). Those wanting to see it in action won't wait long. The first fully functional demonstrator vehicles of the Mullen FIVE EV Crossover will begin arriving this October. That's just one vehicle launch in the queue.
Beyond the FIVE's market intro, 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, which positions them ideally to capture share in several markets as one of the few offering electric chassis cabs and platforms in several vehicle classes, and 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.
Better Battery, More Revenues
Advancing through its prototype stage, MULN believes it is 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.
Keep in mind that this current multi-billion dollar battery market opportunity will likely become a trillion-dollar market sooner than later. As is often the case, best-in-class will earn the lion's share of market rewards, and Mullen may be one of the lions. The company recently emphasized how solid-state batteries offered higher energy density, faster charging time, smaller size, and safety compared to traditional lithium-ion cells. At current share prices, MULN's promising technology and ongoing evaluations do not appear to factor into its valuation appraisal.
The value of several partnerships is missing, 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. There's more unrealized value.
Mullen and automation company Comau joined forces in a strategic alliance to develop a state-of-the-art body shop and is also working with Dürr, supporting assembly and paint shop technologies. They 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. Tapping into the experience of both, near-term expansions at the facility include integrating general assembly and test track infrastructure.
More value can accrue from MULN's desire 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 strengthen the value proposition. At roughly $0.24 a share, the accretive value from all the above appears to be entirely absent.
An Infrastructure Supporting Higher Prices
Still, while value from assets and accretive partnerships are lacking, so is the value from an impressive and state-of-the-art supporting infrastructure that can expedite market penetration and enhance 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. Different again in a good 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 further supported by mobile service technicians available for off-site vehicle repair and service.
Put into better perspective, Mullen has created an equation where the sum of its parts, including its products, services, technology, and marketing strategy, exposes a value proposition and opportunity that may be too good to ignore. And as Mullen continues to successfully separate itself from a field where substance matters more than conceptual ambition, likely, savvy investors won't.
A Value Play On Substance, Not Hype
They shouldn't, recognizing that MULN makes its case for investment consideration on substance, not hype. Of course, weak broader markets and decidedly bearish sentiment for EV sector exposure have led to a decline in MULN price. But, if there's one thing investors should know is that markets rotate, and when they do, the most undervalued company stock gets scooped up the fasted. Don't be misled by headlines, the market rotation to EV will come again, and positioning ahead of the herd mentality could lead to enormous gains from the market price disconnects in play today. Mullen Automotive, all tolled, should be high on investors' lists.
Not because its stock can rise as part of a momo play or because good news can send a significant short position to run for cover. But because MULN is doing the right deals to create, build, and sustain value. Its Mullen FIVE, commercial fleet vehicles that target a massive last-mile delivery industry, innovative battery solutions, and strengthening ability to meet the growing urgency surrounding sustainability all contribute to the bullish proposition.
Thus, when a company's sum of its parts creates a value proposition too good to ignore, perhaps the best course of action is not to. And after earning impressive coverage and interest from the LA Auto Show, and with vehicles, infrastructure, assets, and a strategy to grow bigger faster, the bottom line could be that the path of least resistance for Mullen Automotive stock is higher. For long-sided investors, that's always a nice place to reside.
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