At the height of the electric vehicle stock bubble, Mullen (NASDAQ:MULN) stock traded at close to $16. Those glory days are long over. Now that it trades like a lottery ticket, MULN stock is a worthwhile bet. Odds are better than a lottery ticket after Mullen posted its battery test results.
The battered stock market is too fearful to bet on companies in the discovery phase of product development. Mullen’s results from Indiana’s Battery Innovation Center should allay those concerns.
On May 31, 2022, the company reported that its solid-state polymer battery cell testing exceeded previously stated values of 300 Ah.
Impressive Battery Test Results
The EV market needs new developments in the solid-state polymer battery cell technology space. Mullen’s data suggests that it may scale the battery to a vehicle pack level. If it had a battery pack at a 150-kilowatt hour equivalent, it could deliver over 600 miles of range. Mullen’s FIVE EV Crossover are good-looking vehicles.
Its battery results are another step for MULN Stock to offer customers long-range driving on the EV crossover. Investors are growing confident that the company will have solid-state batteries that have higher energy density. In addition, they will have a faster charging time. Furthermore, the smaller size will cut its weight and offer greater efficiency compared to traditional lithium-ion cells.
Mullen’s battery results timed well with its “Strikingly Different” tour in the U.S. The company visited 19 cities. The campaign will increase the brand’s awareness in an increasingly crowded EV market.
EV investors could return to buying Tesla (NASDAQ:TSLA). The stock traded at or above $1,100 several times since November 2021 only to fall. Tesla is the earliest player in the EV space. It has the strongest brand power and name recognition. Still, Mullen shares trade at a fraction of the price of a Tesla stock.
Investors seeking exposure to the truck EV market may consider Rivian Automotive (NASDAQ:RIVN). Rivian has Amazon.com (NASDAQ:AMZN) and Ford Motor (NYSE:F) as its early investors. Rivian could win a big supply contract with Amazon. If selected, it will enjoy steady demand for its EVs for many years.
In the luxury EV market, watch Lucid Group (NASDAQ:LCID). The company established a massive $1 billion revolving credit facility on June 15, 2022. As credit markets tighten, Lucid will have plenty of liquidity. It needs the cash to cover its high cash burn rates. Expenses will remain high until Lucid offers a mass-produced EV for the mainstream market.
The Bottom Line
Mullen’s positive battery developments will need more capital. To shift from development to production, Mullen will need billions more in funding.
Mullen’s stock dilution is a concern. It raised $2.5 million worth of shares of service. It also paid employees with stock compensation worth $1.6 million. Higher cash burn rates will dilute shareholders further.
Mullen Automotive is a buy for speculators looking for a lottery ticket. The company recently posted good battery development results. It will need to give investors a timeline on product development and projected sales. Any vague details are unwelcome.
The market is not willing to speculate on companies that do not bring products to market. Credit markets are getting worse, limiting funds for Mullen to raise.
On the date of publication, Chris Lau 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.