Stock of Mullen Drops to Record Low After Update on EV Production

Mullen Automotive Inc. finds itself mired in a persistent downward spiral as it grapples with its latest production update for electric vehicles (EVs). This recent announcement has sent the company's stock, trading under the ticker symbol MULN, tumbling further into uncharted depths. It's worth noting that this decline comes on the heels of a four-day losing streak during which the stock plummeted by 17.6%, leaving it poised for a third consecutive record-low closing price.

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For Mullen Automotive, these record-low levels have been a recurring theme since August 16, and this downward trajectory persists even after the company executed a one-for-nine reverse stock split on August 11. This strategic maneuver was intended to revitalize the stock's value, but it has proven to be a temporary Band-Aid on what appears to be a more significant issue.

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Mullen Automotive's most recent update is focused on its production plans. The company claims that it remains on schedule to manufacture 150 Class 3 EV trucks, specifically designed for light-duty purposes, by the end of this year. Additionally, they are looking forward to commencing the production and delivery of Class 1 EV cargo vans in the fourth quarter of 2023.

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Despite these optimistic production projections, the market has not responded favorably. In fact, Mullen's stock has continued its slide, dropping by 3.6% in morning trading. This ongoing decline is a cause for concern for the company and its investors, as it underscores the challenges that Mullen Automotive faces in regaining market confidence.

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To add context to these production milestones, Mullen has reported that the estimated 150 Class 3 EV trucks are earmarked for delivery to Randy Marion Automotive Group, with the initial batch of 10 units slated for delivery on September 28. However, Mullen's ambitions extend beyond this initial order, as they plan to deliver more than 150 Class 3 vehicles to Randy Marion this year. Furthermore, they aim to fulfill the remainder of a 1,000-vehicle purchase order, which includes 850 trucks, in 2024.

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The company's aspirations aren't limited to Class 3 vehicles. They have also set their sights on Class 1 EV cargo van production, which is expected to kick off in the current quarter with a projected output of 300 EVs. Looking ahead to 2024, Mullen envisions a substantial leap in production, with plans to manufacture 6,000 Class 1 EV cargo vans.

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Despite these production goals and the potential they represent, the stock's performance tells a different story. Over the past three months, Mullen Automotive's shares have plummeted by a staggering 73.2%. This sharp decline starkly contrasts with the broader market trends. During the same period, the Global X Autonomous & Electric Vehicles ETF (DRIV) has experienced a relatively modest decrease of 14.3%, and the S&P 500 index (SPX) has only relinquished 3.1% of its value.

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The substantial underperformance of Mullen Automotive's stock raises questions about the company's ability to translate its production plans into tangible results and market confidence. Investors and industry observers will undoubtedly keep a close eye on the company's future developments as it navigates these challenging market conditions.

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