Shares of Mullen Automotive (NASDAQ:MULN) are in the red today, despite the electric vehicle (EV) company announcing that it has delivered the first 10 Class 3 EV cab chassis trucks, or Mullen THREEs, to Randy Marion Automotive Group (RMA) for an invoice of $630,000. The delivery was part of RMA’s purchase order for 1,000 Class 3 trucks valued at $63 million, which was placed last May.
By the end of the year, Mullen expects to deliver another 150 Class 3 trucks to RMA. It will likely deliver the remaining 840 trucks to RMA by the end of 2024. This is well below the 930 Class 3 truck guidance for 2023 that CEO David Michery previously gave in an interview. He guided for 3,000 Class 3 vehicles in 2024.
“This is a significant point in our evolution as we shift the Company from engineering development and engineering approvals to production and vehicle deliveries for our customers,” said Michery. “As the Class 3 line is fully operational, production will be increasing month-to-month throughout the next year.”
MULN Stock: Mullen Delivers 10 Class 3 Trucks to RMA
Mullen noted that the delivery was a significant accomplishment, as the truck is the first to be produced, assembled and delivered for the company. “Produced” may not exactly be the most appropriate word here, as the truck was likely sourced from China, specifically from Chinese automotive company Nanjing Automobile Import and Export Co (NAIEC). Afterwards, modifications were likely added in order to make the vehicle suitable for U.S. roadways.
Assembly of the THREE is currently taking place at Mullen’s facility in Tunica, Mississippi. The facility has a capacity of 3,000 Class 3 vehicles annually per shift. Mullen added that “As electric vehicle adoption rates increase” capacity will increase to 6,000 vehicles per year.
Earlier this week, the company announced that the THREE had received Environmental Protection Agency (EPA) certification. On top of that, the THREE had also completed all of the required testing requirements under the Federal Motor Vehicle Safety Standards (FMVSS). The completion of these two actions have allowed Mullen to begin customer deliveries of the truck.
Besides the RMA purchase order, Mullen has also received THREE purchase orders from MGT Lease Company and NRTC Automation Group. MGT has placed an order for 250 THREEs through a contract valued at $15.7 million, while NRTC’s initial purchase order was for just three trucks.
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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.