Mullen Automotive (NASDAQ:MULN) stock is in focus after the company announced that the IRS had approved Bollinger Motor as a “qualified manufacturer” for its Bollinger B4 chassis cab to receive clean vehicle credits under the Inflation Reduction Act of 2022. This means that eligible buyers of the B4, which can include businesses and tax-exempt organizations, can receive a tax credit of up to $40,000 per vehicle.
“Bollinger Motors is poised for growth and we’re ready to help electrify America’s fleets,” said Bollinger founder and CEO Robert Bollinger. “These tax credits are an important incentive for our customers to replace their gas and diesel trucks and lower their total cost of ownership.”
MULN Stock: Bollinger’s B4 Eligible for $40,000 Tax Credit
According to Mullen, the tax credit will equal the lesser of 15% of the buyers basis in the vehicle (or 30% if the vehicle doesn’t run on gas or diesel) or the “incremental cost of the vehicle versus a comparable vehicle with a gas or diesel engine.” Mullen noted that the B4 qualifies for the full tax credit of $40,000.
In September 2022, Mullen acquired a 60% controlling interest in Bollinger for $148.2 million in cash and stock. Back then, Mullen stated that the acquisition would accelerate deliveries of the B4 to 2023, which didn’t happen. The company also stated that Bollinger’s B1 and B2 vehicles had almost 50,000 reservations.
Now, Mullen expects deliveries of the B4 to begin during the second half of 2024, compared with a production estimate for “mid-2024” on Jan. 19. Bollinger has already received an order for 40 of its B4 vehicles. The order is valued at around $6 million.
In Mullen’s acquisition announcement, the company stated that Bollinger would utilize its “solid-state battery technology and expertise.” However, just a few months after the announcement, Bollinger announced that it had selected Our Next Energy ( ) as the battery supplier for its electric commercial trucks. ONE will provide Bollinger with its Aries lithium iron phosphate (LFP) modular battery packs. Last August, the battery startup announced that its Aries II battery pack can provide up to 350 miles of range between charges.
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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.