'Significant Milestone': What's Going On With Mullen Automotive Stock Thursday?

Mullen Automotive Inc MULN shares traded higher early Thursday before paring gains. Here’s a look at what’s going on.

What To Know: Mullen on Thursday announced that it has been approved for Foreign Trade Zone (FTZ) status with the U.S. Department of Commerce for its commercial vehicle manufacturing and assembly center in Mississippi.

The FTZ approval qualifies the company for a variety of benefits, including deferment of payments on duties related to import fees. For domestic U.S. sales, Mullen will now be able to match import duty payment to when vehicles are shipped from the zone. The company highlighted this as a key benefit, noting that it will reduce the pressure on cash flow.

Mullen estimated that resulting deferred working capital on domestic sales could result in deferred outlays of up to $21 million for full-year 2024 and full-year 2025.

For international sales, Mullen is now 100% exempt from duties and taxes owed on vehicles exported, “returning a bottom-line pick-up of up to 27% on vehicle kits and 11% on vehicle batteries for a blended average of 20%,” the company said.

“Foreign Trade Zone approval for our Tunica facility is a significant milestone for us, further strengthening our manufacturing position while delivering a competitive advantage and cash flow saving opportunities,” said David Michery, chairman and CEO of Mullen Automotive. 

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The news comes after Mullen shares rallied 19% on Wednesday on high volume following a series of announcements from Mullen this week.

On Monday, Mullen announced that it added National Auto Fleet Group (NAFG) to its dealer lineup. NAFG will support national fleet customers via Sourcewell and offer Mullen’s commercial vehicle lineup in two locations in California.

Mullen also announced on Monday that its board unanimously adopted a limited duration stockholder rights plan intended to promote the fair and equal treatment of all stockholders.

On Tuesday, Mullen announced that its subsidiary Bollinger Motors entered into an agreement with Amerit Fleet Solutions, under which Amerit will provide mobile service and maintenance to Bollinger’s commercial fleet customers. The two companies will jointly provide EV service and warranty support for the Bollinger B4.

MULN Price Action: Mullen shares were down 4.98% at $6.53 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Mullen Automotive.