Shares of Mullen Automotive (NASDAQ:MULN) have hit a new 52-week low of 18 cents, as today is the day that DelPack Logistics (DPL) could receive 300 Class 2 cargo vans from the electric vehicle (EV) company. The day is almost over, and there is still no confirmation that DPL has requested the vehicles. MULN stock is down nearly 5% on the news today.
Back in July, the two companies signed a binding agreement for DPL to purchase up to 600 vans over the next 18 months. The agreement also stated that the first 300 vans could be delivered by today, Nov. 30, “at the request” of DPL. DPL operates as an Amazon (NASDAQ:AMZN) logistics partner that serves areas in Indiana.
Each van would carry a “special purchase price” of $35,000, meaning the total order value of 600 vans would be $21 million. Furthermore, each van has a range of at least 200 miles with a maximum payload of 3,296 lbs.
The silence of the delivery status from Mullen has caused shares to fall. CEO David Michery has also not issued any updates through his social media profiles.
MULN Stock: 3 Reasons Mullen Could Miss Its Key Nov. 30 Deadline
As a result, investors are wondering why the deliveries have not been announced yet. It’s still possible DPL could receive vans from Mullen, as the agreement provided an 18-month timeframe from July. That means the deadline for DPL to receive vans would be during January 2024.
In the agreement, the two companies highlighted three specifications for receiving the vans:
- Mullen most provide DPL with pilot vehicles to test, examine and drive.
- All of the vans must be fully homologated for the U.S. and be equipped with certified airbags and a cabin comfort package. The features in the package include adjustable seats, cup holders, an infotainment system and a comfortable passenger seat.
- If the vehicles fail to live up to DPL’s expectations, the shipping company could provide specification requests to Mullen for changes.
So, failure to meet any of the above requirements could have caused DPL to not order the vans. In addition, the wording of the agreement, namely “up to 600 Mullen Class 2 Electric Cargo Vans,” makes it seem as if DPL could order zero vans and still abide by the agreement.
Investors have been left in the dark on the arrangement, and an update from Mullen is much needed.
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