Mullen Automotive (NASDAQ:MULN) issued a press release on May 10 that provided investors with an update on its solid-state polymer battery testing. MULN stock initially jumped more than 7% in pre-market trading. David Michery, chief executive officer and chairman of Mullen Automotive said, “I am pleased with the initial preconditioning results on our solid-state polymer battery cell and we’re progressing to the next stage of testing with BIC. […] The battery has performed well and I’m looking forward to see finalized testing results from BIC later this month.” If you’re thinking about buying on the news, I wouldn’t be so quick to act. Mullen has a long way to go before it’s worthy of your hard-earned capital.
However, any time you can trot out positive news, it makes sense to do so. You can’t fault Michery for wanting to let investors know that its battery testing is progressing nicely. This latest news follows its late-April press release that it is retrofitting its Monrovia, California facility to produce electric vehicle (EV) battery packs for the ONE EV Cargo Van, FIVE EV Crossover, and DragonFLY EV Sportscar.
Everything about Mullen’s presentation points to an EV startup destined for greatness. InvestorPlace contributor GS Early boldly argued that Mullen is the only rationally valued EV maker at the end of April. At the time, MULN stock was down 74% year-to-date, suggesting the upside was greater than the downside. It’s down 21% since.
In mid-April, I highlighted that Mullen spent just $3.1 million on research and development in 2021, just 2% of what QuantumScape (NYSE:QS), a leading developer of solid-state lithium batteries, spent. Yet, Mullen’s market capitalization is almost 6% of QuantumScape’s $5.06 billion valuation.
Further, QuantumScape’s battery testing is miles ahead of Mullen’s. The company reported on May 2 that its 16-layer solid-state cell testing showed that they were capable of 500 charges without losing significant energy. Lastly, Mullen is facing class-action lawsuits that allege it made several misleading or outright false statements about the future of its business. Despite the news, Mullen remains nothing but smoke and mirrors.
MULN stock is barely over $1 for a reason. Do not fall for the company’s blatant bait-and-switch investor relations tactic.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.