Where are we really with Mullen Automotive (NASDAQ: MULN)? In an atmosphere of SPAC’s, freshly-polished IPOs and over-embellished projections, it’s becoming increasingly difficult to judge the financial legitimacy of the EV landscape. With little separating each company’s bold claims, it's the meticulous details surrounding unique tech or supply chain solidarity that amplify positioning.
Mullen has already announced it has begun work on its battery-manufacturing facility in California, potentially navigativing the supply chain plague that sways from manufacturer to retailer. Today, the company announced it has begun testing its solid-state polymer batteries at the Battery Innovation Center in Indiana. What does this mean?
Almost nothing. Sure, the engineering behind solid-state polymer batteries can be praised over its lithium alternative as it beats hands-down on range. Mullen notes that when scaled to vehicle-pack level, the battery can deliver on 600 miles of range. Unfortunately for Mullen investors, this early stage of testing brings little to be excited about; certainly not warranting the 12% share gain in Thursday’s early trading. In 2021, Mullen had only invested around $3M in R&D. Well traditionally, it takes a substantial amount more than that to bring solid-state batteries to the production lines.
Perhaps this is Mullen ramping up its tech spending, in which case, any forthcoming earnings releases will revolve around heavy spending until its polymer batteries are ready. Sentiment towards Mullen seems a little chaotic recently, often gapping up or down over 10% over largely speculative news.
This isn’t to say that Mullen’s solid-state battery tech won’t be a future selling point, but the company is still early on its growth journey. Investors buying now might be a little early to the party, will likely be subject to bouts of volatility, and victim to a prolonged downside.
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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.