To say the EV startup world is a world of fly-by-night operations and high risk is a bit of an understatement but Mullen Automotive (NASDAQ: MULN) is proving not all EV companies are alike. The latest news is a purchase order from Randy Marion Auto Group which is not only a game-changing event but a validation of the string of good news that has come out since October. There is still risk in this company but the odds are growing that it will become one of the EV startup market’s biggest winners.
“We see a tremendous opportunity with the Mullen commercial portfolio and the launch of the commercial van could not come at a better time,” said Randy Marion, CEO and founder of RMA. “There’s significant pent-up customer demand for Mullen to fulfill. I have many customers looking at me to find product for their companies.”
Randy Marion Isuzu to Purchase 6,000 Class-1 Vans from Mullen
Mullen received a purchase order from Randy Marion Isuzu for 6,000 of its Class-1 cargo vans. The deliveries are slated to begin in Q1 of 2023 which is just around the corner. Randy Marion Auto Group is one of the largest networks of dealerships in the southeast and among the country's largest suppliers of commercial vehicles. It is also Mullen Automotive's first dealer partner.
The news is a follow-up to the acquisition of Electric Last Mile Solutions assets in November which facilitated the company’s ability to produce vans. That deal resulted in a functioning production plant capable of building Hummers and Mercedes that will eventually produce Class 1 through Class 3 vehicles under the Mullen and Bollinger Motors brands as well as Mullen’s flagship FIVE SUV crossover.
“This is a real vote of confidence in our company. We appreciate Randy’s vision and aggressiveness to partner with us,” said John Schwegman, chief commercial officer for Mullen Automotive. “He clearly sees the future in commercial EVs.”
“The Randy Marion Automotive team is fully aligned with our Class-1 EV plan and is well positioned to help us capitalize on our first mover advantage in the commercial EV segments,” said David Michery, chairman and CEO of Mullen Automotive.
But investors should be cautious. The EV market has no few turnabouts including those from Nikola Corporation (NASDAQ: NKLA) and Workhorse Group (NASDAQ: WKHS). In the first case, overeager management led to missteps and an implosion of share prices while in the second, faulty design and manufacturing led to a major recall and total revamp of the company. The mitigating factor in this case, however, is that operational quality appears to be de-risked other than hiccups associated with the startup and ramping of any new vehicle lineup.
Dominoes in Place
The way the news has been coming out since October it appears as if CEO David Michery had it all planned out but the timing suggests otherwise. The dominos may have been in place but it was the purchase of ELMS assets that catalyzed the narrative and has this company on track to produce revenue in Q1 2023. That is on top of any sales of the I-Go in Europe which could commence by the end of this year. The takeaway is the upcoming shareholder vote, the potential for a reverse stock split and an increase in allowable shares is becoming less and less of an issue for this market.