Shares of Mullen Automotive (NASDAQ:MULN) stock opened the week in the green after the electric vehicle (EV) company announced that it had produced its first Mullen THREE at its commercial vehicle assembly facility in Tunica, Mississippi. However, MULN stock hasn’t stayed in the green this morning and is down about 1% as of this writing.
The Class 3 truck starts at an MSRP of $68,500 and is eligible for $7,500 in federal tax incentives. The THREE also carries a gross weight vehicle rating of 11,000 lbs. and has a range of 130 miles. Mullen has already received a $79 million purchase order for the truck from Randy Marion Automotive Group (RMA) and MGT Lease Company.
“We have been true to our commercial Class 3 vehicle production commitments and have now achieved a significant milestone with the first trucks rolling off the line,” said CEO and Chairman David Michery.
MULN Stock: Mullen Produces First Class 3 Electric Vehicle
Mullen has stated that it will ramp up production during the remainder of the year. Upon achieving “full acceleration,” its Tunica facility is expected to produce 3,000 vehicles annually per shift. Once “electric vehicle adoption rates increase,” Mullen plans on adding a second shift that will allow for the production of 6,000 vehicles per year. A specific timeline for when these production targets would be achieved was not provided. However, the 3,000 vehicle target was consistent with the 2024 guidance Michery previously provided in an interview. Michery also provided 2023 THREE guidance of 930 vehicles.
While the company ramps up THREE production, it also plans on initiating production testing for its Class 1 EV Cargo Van, the Mullen ONE. Mullen noted that it would deliver both vehicles to customers before the end of the year. The company has guided for production of 660 Class 1 vehicles this year.
Mullen’s production target of 3,000 to eventually 6,000 THREEs per year is ambitious. For comparison, Mullen’s significantly larger EV competitor Lucid (NASDAQ:LCID) only produced 7,180 vehicles last year. Mullen expects to produce a total of 1,590 vehicles in 2023 and 14,368 vehicles in 2024, implying a growth of 804%.
These estimates are eye-opening, as some shareholders are wondering if Mullen has the cash to meet these targets. At the same time, it appears that Mullen isn’t exactly creating these vehicles from scratch. These vehicles are likely being sourced from China and then outfitted to meet the standards of Mullen’s customers.
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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.
