Mullen Automotive (NASDAQ:MULN) stock opened higher by about 5% after the electric vehicle (EV) company announced it had signed a vehicle purchase agreement with MGT Lease Company for 250 Class 3 cab chassis EV trucks, also known as the Mullen THREE. In total, the contract is worth $15.75 million. The THREE carries a manufacturer’s suggested retail price (MSRP) of $68,500 and is eligible for a $7,500 federal tax credit. Dividing $15.75 million by 250 gets us to about $63,000 per vehicle.
Mullen Chief Commercial Officer John Schwegman said the following about the news:
“Momentum continues following last week’s pricing announcement for our Class 3 all-electric cab chassis truck. We are excited to begin delivering trucks to MGT Leasing this summer as they continue to scale up their business.”
Mullen expects deliveries for the purchase agreement to begin in August, with full completion of the order slated for December. Randy Marion Automotive Group (RMA) will assist in fulfilling the order.
MULN Stock: Mullen Signs Purchase Agreement With MGT
In late March, Mullen previously announced it had delivered four Class 1 EV vans to MGT. The company added that it expected “subsequent future deliveries.” MGT appears to have been satisfied with that initial order of EVs, as evidenced by the new order. Per Mullen, MGT is a “leasing company with annual revenue of over $70 million in 2022 and $100 million projected for 2023.”
On May 2, Mullen also disclosed it had received a 1,000 vehicle purchase order for the THREE worth $63 million from RMA’s Randy Marion Isuzu ( ). As with the recent 250 vehicle order, Mullen expects deliveries for the 1,000 vehicle order to begin in August. For the RMI order, Mullen expects to complete deliveries by the first quarter of 2024.
Mullen will assemble the THREE trucks at its facility in Tunica, Mississippi. Production will commence starting in July, with revenue expected to stream in starting in August. Mullen added in a recent company update that it had hired “35 additional operational team members” to support production efforts.
Each THREE has an estimated range of 130 miles and a max payload of 5,802 lbs. In addition, the truck has a turning diameter of 38 feet for narrow streets.
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On the date of publication, Eddie Pan did not hold (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.