Mullen Stock: The Mysterious Shrinking (Car) Price

From $0.06 per share to $1.50 per share… to $1.40, $0.95, $0.75, and — as of today — just $0.15 per share, much ink has been spilled in recent days about Mullen Automotive’s (NASDAQ:MULN) incredible shrinking stock price.

But today we want to talk about something else Mullen-related: The just as dramatic shrinkage in the MSRP of Mullen’s electric automobiles.

According to the company’s own website, Mullen currently has three models of electric vehicle for sale: the Mullen Campus electric van (with an MSRP starting at $23,995), the Mullen One EV costing $34,500, and the Mullen Three electric tractor (as in one half of a “tractor trailer”), retailing for $68,500. 

Of these three, production of the Mullen One seems to be picking up speed fastest, with management announcing last week that it will ship 350 units of (presumably Mullen One) “Class 1 vehicles” from its production plant in Mishawaka, Indiana to its assembly plant in Tunica, Mississippi. A further 300 Class 1 vehicles are scheduled to be shipped between the two plants later this year.

At the prices Mullen is advertising on its website, this implies the company could generate as much as $22.4 million in revenue this year from the sale of these 650 electric vans — a respectable start for a start-up EV company. And yet, all may not be as it seems, as a couple of recent press releases suggest.

Specifically, on June 29 Mullen announced to much ballyhoo that it had just booked “the company’s first recorded revenue” from the sale of EVs in June, when it sold 22 EV cargo vans to the Randy Marion Automotive Group for a total purchase cost of $308,000. 

That sounds like good news, of course, but $308,000 divided by 22 EVs sold works out to an average purchase price of not $68,500, or $34,500, or even $23,995 apiece… but rather just $14,000 per EV.

Or consider this next press release, filed yesterday morning, Monday, June 17: “Mullen Announces 30-Unit Purchase Order for Mullen-GO Commercial Urban Delivery Vehicle from Newgate Motor Group in Ireland.” In its press release, Mullen describes the Mullen-GO as an “urban commercial delivery vehicle [that] is EU standard homologated, certified, and ready for sale in initial markets of the U.K., Germany, Spain, France and Ireland,” but Mullen doesn’t advertise a sales price for the Mullen-GO on its U.S. website. Now, the Mullen-GO EV seems closer in appearance to the pictures of the company’s Mullen “Campus” than to its Mullen “One,” so you might expect its sales price to be below the $34,500 advertised for the One. But even so, the total value of this announced sale is just $321,000 for 30 EVs. Which works out to an implied price of only $10,700 per EV sold.

Mind you, I’m not against low EV prices on principle. To the contrary, if Mullen wants to build electric vans and hand them out for just $10,000 to $14,000 a pop — and can do so successfully, and remain solvent in the process — I just might buy a couple myself.

But it’s the “remaining solvent” part that Mullen shareholders should concern themselves with. With Mullen stock currently losing $750 million a year and now beginning to build and sell EVs at what can be assumed is far below their cost of production, this is a problem that’s only going to get worse.

Overall, MULN has a Smart Score of 1 (out of 10) on TipRanks, meaning that it is likely to underperform the market. (See MULN stock analysis)

Smart Score is TipRanks’ proprietary quantitative stock scoring system that evaluates stocks on eight different market factors. The result is data-driven and does not involve any human intervention.

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Disclaimer: The opinions expressed in this article are solely those of the featured author. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.