Struggling electric vehicle manufacturer Mullen Automotive Inc. said it expects to generate $210 million in revenue in the next 16 months after it received an order from a new Middle Eastern client.
Volt Mobility, a commercial EV leasing firm based in the United Arab Emirates (UAE), has agreed to acquire 3,000 Class 1 and Class 3 EV cargo vans and trucks from Mullen (Nasdaq: MULN) and will eventually include Class 4 vehicles from its Bollinger Motors Inc. subsidiary also.
The Brea-based commercial EV maker will receive an initial $3 million “good faith” deposit as the first 300 vehicles are delivered this year, with Mullen beginning to ship immediately. Additional payments will be made as the remaining 2,700 EVs are received in 2025.
“This landmark agreement provides Mullen with exposure to leading global transportation companies and the opportunity for utilizing Mullen EVs across the UAE and other areas of the Middle East,” Mullen Chief Executive David Michery said in a statement.
Investors have expressed doubts about the electric vehicle maker. After the Aug. 26 announcement, the shares about doubled to 57 cents each on volume of 422 million shares, almost seven times the daily average. By press time last week, they were at 22 cents each and a $14.8 million market cap. Last October, the shares reached a 52-week high of a split adjusted $75 each.
Michery last year said he did not believe the trading price of the stock even closely resembled the company’s actual value. Mullen has previously said it’s the victim of malicious short trading called “spoofing,” and it’s sued traders on Wall Street.
Revenue Starting
Volt’s vehicle order will be assembled at Mullen’s Tunica, Mississippi-based Commercial Vehicle Facility, which totals 120,000 square feet. Michery said that the Tunica facility “has manufactured hundreds” of Class 1 and Class 3 EVs this year, helping Mullen to begin fulfilling previous orders.
The factory can produce 20,000 Class 1 and 6,000 Class 3 vehicles annually with two production shifts, Mullen said last week. Mullen also has a 650,000-square-foot facility in Mishawaka, Indiana.
A year ago, Mullen received IRS approval for federal EV tax credits on its commercial vehicles for up to $7,500 per vehicle.
As of January, both the Mullen ONE, a Class 1 EV cargo van, and Mullen THREE, a Class 3 EV cab chassis truck, are certified by both the California Air Resource Board and the Environmental Protection Agency. California regulators have also approved a $45,000 voucher for the purchase of each Mullen.
The company has burned through its cash while revenue has been slow to be recognized.
Mullen, which recorded its first ever revenue of $366,000 for the fiscal year ended Sept. 20, 2023, thus far this year has reported $98,570 for the nine months ended June 30.
During this period, Mullen said it invoiced for 377 vehicles valued at $16.8 million that haven’t been paid yet. According to SEC filings, Mullen will defer recognizing the revenue until the vehicles have been sold.
“We are positioning our fiscal Q4 for strong year-over-year growth,” Michery said in an Aug. 12 statement. “We narrowed our loss in the quarter and year-to-date.”
Its net loss was $289.9 million for the nine months ended June 30, down from a $792.7 million loss in the same period a year earlier. The company reported about $4 million in cash as of June 30, versus $155.7 million last Sept. 30.
In May, the company received a $100 million financing commitment from New York’s Esousa Holdings.
The investment, along with an additional $50 million of senior secured convertible notes sold to other family offices and high-net-worth investors, will go toward funding Mullen’s business operations for one more year.
The company has also secured another $150 million as an equity line of credit, reported in SEC filings from May.
The last significant order of Mullen vehicles, of a similar value to Volt’s purchase, came through at the end of 2022 with Randy Marion Isuzu LLC, of the Randy Marion Automotive Group, acquiring 6,000 Class 1 EV cargo vans that Mullen valued at approximately $200 million. Mullen filings haven’t disclosed the current status of this order.
Orders
Founded in 2020, Volt said it’s one of the largest commercial EV leasing companies in the region, offering 17 models with focus on light, medium and heavy-duty electric vehicles. Volt said its clients are spread throughout the Middle Eastern countries like Saudi Arabia and Kuwait.
The UAE, one of the world’s largest oil producers, is seven years into a plan to decarbonize its infrastructure and energy production with the aim of generating 100% of its power from clean energy sources by 2050.
“Our mission is clear: lead the transformation to sustainable, efficient and cutting-edge transportation,” Sophia Nau, managing director and CFO for Volt Mobility, said in a statement.
Mullen said it sees the UAE as “a strategic entry point” to the Gulf Cooperation Council market and is appointing Volt as its exclusive representative in the region via the agreement, according to SEC filings.
Mullen will also set up a service center in the UAE as part of the 16-month agreement.
