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Mullen Automotive: Will Bollinger Motors stake get MULN stock price moving again?

By David Burrows

10:41, 12 September 2022

Mullen EV vehicle at Los Angeles car show. Credit: Shutterstock
Mullen hopes stake in Bollinger will boost EV sales, Credit: Shutterstock

Late last week, Mullen Automotive announced the acquisition of a 60% stake in Bollinger Motors for $148.2m in cash and stock.

Mullen and Bollinger are essentially both start-ups – with Mullen only becoming a publicly-traded company on the NASDAQ in November 2021.

The ambition for both (Mullen and Bollinger) companies has been to develop a significant foothold in what is still a nascent EV sector. Even allowing for the fact that established names including Tesla (TSLA) and Mercedes Benz have launched and updated EV vans (as well as cars) in this space.  

Tesla share price chart

It is hoped the stake in Bollinger will increase the number of EV vehicles the combined business is able to bring to market.

This could, in turn, provide a much-needed boost to Mullen’s profile as well as its share price. Soon after launch, the stock price rose as high as $13.14 but has fallen significantly since  - currently at the $0.56 level.   

Whether now proves a good entry point for investors is debatable. For many in the EV industry, supply issues and volume production have been the key challenges.   

David Michery, CEO and chairman of Mullen Automotive has certainly played up the significance of the Bollinger acquisition implying it could prove a game changer.

“This acquisition is one of the largest in the EV industry to date and provides Mullen with the unique opportunity to aggressively expand into the high-demand commercial EV space. The strong interest shown by major customers in all the high-volume segments like delivery, telecom, municipal services, and utilities is a clear indication of the market’s desire for Bollinger’s vehicles,” said Michery.

“Combining Bollinger’s vehicles with our existing class 1 and class 2 EV cargo van programs gives us the chance to dominate the entire class 1-6 commercial light and medium duty truck segments”.

 In addition, he said Bollinger would be able to leverage Mullen’s battery technology, making their current vehicles even more competitive.

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TSLA

175.03 Price
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Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
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+2.270% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
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NVDA

948.80 Price
+2.530% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.84

AMC

4.79 Price
+3.100% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.06

In-house battery pack production

A few months ago, Mullen announced it would produce battery packs for its EVs. Producing batteries at its Californian base, argued Mullen, would reduce reliance on third-party suppliers, reduce costs and improve the quality of the packs themselves.

The question now is how quickly and effectively can Mullen (post- Bollinger acquisition) get units to market and sold?

Mullen has stated that it intends to continue manufacture of Bollinger’s B2: Class 3 Sport Utility EV Truck, as well as the B1: Class 3 Sport Utility EV SUV.

The acquisition brings Mullen nearly 50,000 reservations previously taken for the B1 and B2 sport utility vehicles.

Bollinger had previously paused production of B1 and B2 vehicles to focus on commercial truck development.

Like Bollinger, Mullen will put the B4 electric commercial truck as the priority launch. Both B1 and B2 manufacturing will begin after the start of production for class 3-6 commercial trucks.

The word ‘potential’ may be applied frequently to Mullen and this deal could prove hugely beneficial in terms of enabling meaningful units for production and sale but as Simply Wall St points there is little or no history to go on.

It points out that at the moment revenue figures are low and over the last three months Mullen has seen a volatile share price as well as significant insider selling.

It is probably a speculative trade but it could be argued this is reflected in its $0.56 share price.

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TSLA
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175.03 USD
-2.62 -1.480%

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