Mullen Automotive (NASDAQ: MULN) stock is up 28% this morning. This appears to be off the back of a corporate announcement about increased efficiency possible from their and other electric cars. This might be a fun bounce in the MULN stock but we remain convinced that Mullen is going to need something much more than this to solve its problems.
That problem being that there's been a lot of talk and capital concerning Mullen. But little actual action as far as building vehicles and getting them out onto the road. We're gloomy about the prospects of their ever moving to volume manufacture as well. As we are of anyone being able to break through - again - like Tesla did into mass manufacture. We just think the time for that to be possible has passed. It's not just Tesla, the big manufacturers are pivoting to EVs- VW, Ford, Stellantis etc. Then there's also the influx from the Chinese manufacturers, Geely and so on. We're simply not sure we see the room for anyone to grow from a standing start to volume again.
Mullen Automotive stock price from NASDAQWhat makes us cautious about this specific announcement is twofold. Firstly, we don't see how this helps the major issue of getting to manufacturing scale. The second is, well: “Specific vehicle testing of a high-volume OEM electric vehicle by Element resulted in a calculated increase in range from 269 to 431 miles, which is a 60% increase in efficiency.” OK, that's great. That tech is a part of a recently acquired JV and is patented. That's also great.
Except there's never just the one way to do things. If battery and distance can be improved by 60% in one way then there will be others to mimic that. So this tech won't remain exclusive for long, even if this exact and patented method does. Sure, it's a nice advantage for Mullen to have - but it still doesn't, we think, solve the long term problem.
Our view of Mullen is that it's still a lovely stock to trade in and out of. High volatility, lots of liquidity, a great place to play. But it's not crossed the line into being an investment and we're unsure it ever will.
