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Wednesday, Feb 21, 2024

Phoenix Motor, Mullen Scoop Up EV Assets

A pair of local, publicly traded electric vehicle companies recently became the beneficiaries of fellow EV businesses that have seen better days.

Phoenix Motor Inc. (Nasdaq: PEV) this month acquired some of the assets of Burlingame-based electric bus and battery maker Proterra Inc., which filed for Chapter 11 bankruptcy in August after grappling with supply chain troubles, slowing demand and declining capital.

The Anaheim-based commercial EV truck company paid $10 million for Proterra’s transit business line and battery lease assets, which it won via a court-overseen auction.

Proterra went public in 2021 via a reverse merger with a special purpose acquisition company, or SPAC. That deal initially valued the company around $1.6 billion.

Brea-based Mullen Automotive Inc. (Nasdaq: MULN) in September absorbed certain assets of Romeo Power Inc., which parent company Nikola Corp. (Nasdaq: NKLA) liquidated less than a year after acquiring the Cypress-based electric battery maker.

The closure marked one of the quickest implosions of an Orange County public company in recent memory. Romeo Power went public via a SPAC in late 2020, in a deal that initially valued it around $1.3 billion. It moved its base to OC in June 2022.

EV maker Mullen paid around $3.5 million to acquire Romeo’s battery pack and module production equipment and inventory.

Phoenix Takeover

Phoenix’s share of Proterra’s assets will add electric heavy-duty transit buses to the company’s product line of medium-duty shuttles and school buses.

“Proterra has built a strong market share in the full-size, zero-emission transit bus market, just as Phoenix has done in the medium-duty market,” Phoenix CEO Denton Peng said in a statement.

Proterra has accounted for over 40% of all electric buses delivered in North America with over 40 million service miles, Phoenix Senior VP of Corporate Development Mark Hastings said in a conference call this month.

The company sold its electric buses to public transit agencies, airports, universities and other organizations in need of fleets.

Proterra reported $309 million in revenue in 2022, and $251 million in revenue for the first nine months of 2023.

Phoenix Motor, by contrast, reported $3.2 million in revenue for the first nine months of the year.

Phoenix will continue to operate Proterra’s transit bus manufacturing center in Greenville, S.C., Hastings said in the call. The company also aims to ramp up production for the Proterra ZX5 Electric Transit Bus, which can get up to 340 miles on a single charge. By contrast, Phoenix’s shuttle bus lasts up to 160 miles per charge.

Shares in Phoenix last week were $1.37 apiece, giving it a $29 million market cap. The company went public last year via an initial public offering priced at $7.50 a share. It raised almost $16 million in proceeds from the IPO.

Mullen Fullerton Facility

Mullen’s acquisition of Romeo’s assets “further enhances our capabilities for battery pack production right here in California,” Chairman and CEO David Michery said in a statement.

Romeo’s production lines for battery packs and R&D module development will find a new home in Mullen’s recently secured facility in Fullerton.

The 122,000-square-foot battery plant, at 1500 E. Walnut Ave., will also house the other assets Mullen acquired from Romeo, including battery testing systems, furniture and fixtures.

Mullen aims to consolidate its assets from Romeo with the equipment from its Monrovia battery pack facility at its Fullerton center. The company aims to close its Monrovia facility by the end of the year, officials say.

As of last week, shares in Mullen were 16 cents apiece, giving the company a $68 million market cap. The company’s yet to see substantial revenue as it ramps up production of its initial consumer-focused EVs.

Autonomous Driving Ambitions

Phoenix has also made moves to enhance its tech since its winning bid for Proterra assets.

The company this month tapped Rayz Technologies’ light detection and ranging (LiDAR) system to enable “intelligent driving” for its next generation of electric pickup trucks, buses and other vehicles.

“LiDAR is an important sensor for realizing autonomous driving,” Phoenix CEO Peng said in a statement.

Both Phoenix and Rayz aim to join forces to develop a more versatile and accessible autonomous driving system for the company’s vehicles, officials said.

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