Mullen Automotive, Inc. is an All-American carmaker based in Brea, California which has been raising eyebrows in the US electric vehicle manufacturing niche, mostly because it seemingly wishes to challenge the market dominance of rival Tesla.
However, there have been naysayers who claim that Mullen isn’t as great as its PR machine declares it to be. Let’s find out more about Mullen Automotive and see if its stock MULN will be in-demand for the near future.
A Brief History Of Mullen Automotive Inc
Mullen Automotive had its start in the “rebadging” business where it would introduce Chinese vehicles under its own brand names in the US market. These Chinese vehicles were known as “captive imports” meaning that the cars themselves were manufactured outside the US but were brought into the US by Mullen.
Since the captive import vehicles carried a US brand, the assumption was that the US market would react favorably so that sales would increase.
However, Mullen did not limit its ambition just to rebadging. In 2021, Mullen introduced its Mullen FIVE EV Crossover sports utility vehicle to the public in the Los Angeles International Auto Show.
This luxury vehicle was a big hit, snaring the “Top SUV Zero Emission Vehicle (ZEV)” award at that event and locking out over 90 other ZEV contenders.
On the merits of the Mullen FIVE EV Crossover alone, Mullen might seem to be a great stock buy already. The FIVE’s ability to run from zero to 80% on a 21-minute fast charge is based on what InvestorPlace.com dubbed the “solid state 95kWh lithium-sulfide battery pack” meaning the SUV can travel 260 miles with just one 21-minute charge.
The car can accelerate within 3.2 seconds from zero to 60. Plus the automaker is a 100% American company whose manufacturing facilities are located within the US, which is good news for the struggling American auto industry. Thus, it does look like a solid performer in the fledgling manufacturing niche of electric vehicles.
The Cons Dragging Down Mullen’s Reputation
However, not everyone considers Mullen stock MULN favorable as a stock investment. For instance, the MULN stock price dropped in value in 2022 after Mullen founder and CEO David Michery revealed to stockholders his controversial “employee incentive” plan.
Under this proposal, Michery would reserve for Mullen employees 175 million common shares of Mullen stock as well as offer a contentious “no stock options repricing” clause, as indicated by InvestorPlace.com.
Though the employee incentive plan may be viewed as extremely generous and a positive way to motivate employees to improve their work performance, it can be risky for Mullen. After all, the automaker is still officially considered a startup and one that intends to keep investing in research and development.
This may mean Mullen will need to keep bringing in capital to fuel such plans and stay ahead of the competition. That may ruffle a few stockholder feathers who might be looking for solid profits on their investment rather than ways to spur employee performance to new heights.
Or it might be just what the car doctors recommend to help Mullen outperform and, more importantly, outsell other electric vehicle manufacturers in the US alone.
And then there is Tesla, the recognized leader of the electric vehicle (EV) manufacturing space. It remains to be proven whether the public will prefer Mullen EVs to those made and marketed by Tesla. In this case, Mullen made sure not to scrimp on its FIVE EV Crossover aesthetics.
After all, some people might be moved to buy a FIVE purely on its sleek looks alone. Other features of the FIVE that the public might appreciate are voice control, sentry mode, facial recognition, noise cancellation, and a “level 2.5 advanced driver-assist system” to quote InvestorPlace.com.
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Mullen CEO Michery himself is quite bullish on the company’s prospects for the future. He recently acquired 30 million shares due to his meeting the requirements for the 2022 and 2023 Performance Stock Award Agreement (PSAA).
But Mullen itself is still in a precarious position despite its award-winning FIVE’s recognition, since the stock price fell 99% this 2023 to below $1 per share on the NASDAQ. Mullen is required by NASDAQ to boost that to at least $1 or better by September 5, 2023.
This means Michery has his work cut out for him to boost Mullen’s standing in the market, if only to reassure stockholders that their investment will bear fruit this 2023 and onwards. So Mullen is not a sure bet yet for market dominance of the EV industry but don’t count it out yet for now.