Almost everything EV-related sold off towards the end of last week as soaring lithium prices are weighing on wide scale production, Tesla amongst others had to close factories in China amid rising Covid fears, and supply chain issues still act as tailwinds to solid growth.
Interestingly for Mullen Automotive (NASDAQ: MULN), the company announced it has begun work on its battery-manufacturing facility in California. Innovation in supply chains is a surefire way to navigate logistical hurdles, but the old-age EV question remains; how long are investors expected to wait?
Just a few weeks ago, Mullen was subject to a vicious report from infamous short-seller Hindenburg Research, claiming similar fraudulent details that plagued EV-truck manufacturer Nikola late last year. Investors aren’t keen on Mullen; the company’s decision for in-house battery production sparked brief buyer interest before closing at a sharp loss of 12%.
Today, there’s some slightly different news. One of the leading EV charging companies, EVgo, hinted on Twitter at a forthcoming partnership with Mullen. The tweet involved a short video of the Mullen FIVE, backing its 325 mile range and short charging time. We can only assume that this is part of a future partnership, the next step in EVgo’s incessant mission to expand through working collaborations.
The reality is, this doesn’t mean much right now. Many speculators argue that EV sales will drop with soaring battery prices, others suggest consumer demand will outweigh inflationary headwinds; regardless, EVgo won’t see consistent revenue growth for some time, especially as the Mullen FIVE isn’t expected until 2024.
For Mullen, shares are currently trading a further 2.5% from last week's loss of almost 30%. Cut from the same cloth as the multitude of emerging EVs, it’s difficult to see a clear path to profit in the short-term.
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Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.