Mullen Automotive (NASDAQ:MULN) stock is surging higher this morning after the company announced that it had signed a binding agreement with DelPack Logistics (DPL). DPL serves as an Amazon (NASDAQ:AMZN) delivery service partner and will purchase up to 600 Mullen Class 2 electric vehicle (EV) cargo vans over the next 18 months.
DPL was founded in 2020 and focuses on last-mile delivery opportunities in urban and non-urban areas of Indiana. The relatively new company does not trade publicly.
The order comes after another delayed announcement, which has hurt shares of MULN stock in the last two weeks. During March, CEO David Michery announced that Mullen would disclose a “major, major Fortune 500 company” sometime during Q2. He also revealed that the customer had participated in a pilot program and was “pleased” with the results. While investors still await the Fortune 500 details, some are choosing to celebrate the DelPack news.
With that in mind, let’s get into the details of the binding agreement.
MULN Stock: Mullen Announces Agreement With DelPack
The cargo vans will be designed for use in the U.S. Mullen says the first 300 vans will be deliverable by Nov. 30, at the request of DPL. From the press release, it appears that DPL has not yet ordered EVs from Mullen, but the company can do so anytime in the next 18 months. The cargo vans will be equipped with a “minimum of an 80 kilowatt per hour battery pack.”
This agreement is a milestone for Mullen Automotive. DelPack is a leader in last mile package delivery and this agreement puts our Class 1 cargo van program front and center for last mile delivery opportunities.
That’s not the only good news, though. Earlier this month, Mullen reported that it had wiped out $17.5 million in company debt. The debt was attributed to a secured convertible promissory note that was executed on July 23, 2020. Now, the EV company has overall debt of $11 million compared to over $30 million at the end of 2021. In addition, Mullen now characterizes itself as having “its best financial health in the Company’s history.”
Furthermore, MULN stock was added to the Russell 2000 and 3000 indices on June 27. The addition will provide the company with increased exposure and liquidity.
On the date of publication, Eddie Pan held a LONG position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.