Shares of Mullen Automotive (NASDAQ:MULN) stock opened in the green after the electric vehicle (EV) company announced that it had kicked off production of its Class 3 Mullen THREE vehicle at its assembly plant in Tunica, Mississippi. From September to December, Mullen will gradually enter into a production ramp-up phase. At full capacity, the Tunica plant is expected to churn out 3,000 Class 3 vehicles per year.
“I am proud to announce that our Class 3 vehicle line is now in production mode at our Tunica facility,” said CEO and Chairman David Michery. “Our team has been working seven days a week, day and night, getting this plant reconfigured and ready for Class 3 production.”
Mullen currently has $79 million in purchase orders for the 1,250 THREE vehicles from Randy Marion Automotive Group (RMA) and MGT Lease Company. Averaging that out gets us to $63,200 per vehicle.
MULN Stock: Mullen Kicks Off Class 3 Production
Mullen’s Tunica plant boasts over 120,000 sq. ft. of space and sits on top of 100 acres of land. The plant is also capable of producing Class 1 vehicles and is located near major rail lines and interstates, which Mullen believes can boost logistical efficiency.
The THREE carries a starting price of $68,5000, “which should qualify for $7,500 in federal tax incentives,” said Mullen. With an estimated EPA range of just 130 miles, range anxiety could be a problem for some of its customers.
Earlier this week, Mullen announced a 1-for-9 reverse stock split but did not immediately provide an effective date. Simultaneously, the company disclosed that it would begin buying back shares as part of its $25 million buyback program. Mullen added that the buybacks would begin once its files its 10-Q and following the expiration of its blackout period.
The reverse split is extremely important for Mullen, as its shares currently trade below the Nasdaq minimum price requirement of $1. Mullen previously reported that it has until Sept. 5 to satisfy this requirement.
In May, MULN stock traded above $1 for 10 consecutive business days. This would have normally satisfied Nasdaq’s requirement. However, in certain cases, Nasdaq requires a stock to trade above $1 for more than 10 consecutive business days. Generally, this requirement extends for no more than 20 consecutive business days.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
