Summary
This detailed report published by Hindenburg Research offers a critical analysis of Mullen Automotive, an aspiring electric vehicle manufacturer. The report highlights significant concerns about Mullen's business claims, founder background, financial stability, product development, and production capabilities.
Who is Mullen Automotive
Mullen Automotive, founded in 2018, is an electric vehicle startup public since late 2021 through a reverse merger. Although it emphasizes developing solid-state battery technology and plans for multiple EV models including luxury SUVs and cargo vans, Mullen has yet to produce a single sellable vehicle. The company is led by founder and CEO David Michery, whose background is in entertainment rather than automotive engineering. Mullen's focus is on disrupting the EV market with proprietary technology and near-term vehicle production, although many of its claims and capacities have been questioned.
Key Points from Report
Battery Technology Claims: Smoke and Mirrors?
- Mullen claims to be on track to commercialize solid-state polymer battery technology within 18-24 months despite spending only ~$3 million on R&D in 2021, far less than billion-dollar investments by industry leaders.
- Independent testing of Mullen’s battery by EV Grid was misrepresented; EV Grid’s CEO stated they never endorsed the public claims about the battery’s performance.
- The company announced a joint venture with NextMetals Ltd. to manufacture batteries, but a senior executive familiar with the deal called it a fabrication, stating no JV existed.
- Mullen licensed its battery technology from Chinese startup Linghang Boao, making only one payment before terminating the relationship; Linghang Boao’s websites are now defunct.
Vehicle Production & Manufacturing Reality Check
- Mullen’s promised electric vans for a major unnamed Fortune 500 customer are actually rebranded Chinese imports from Tenglong and DFSK, not American-made products.
- The company lacks essential EPA certificates and has not begun adequate hiring for production at its Tunica, Mississippi plant, suggesting delays in manufacturing capability.
- Manufacturing plans have shifted multiple times, abandoning large-scale facilities in Washington, California, and Tennessee before settling on a smaller facility previously used for a failed pizza delivery EV project.
- Mullen’s manufacturing facility is sparsely equipped, with advanced machinery photos on its website being stock images.
- The company’s prior announced purchase order for 1,200 vans from a small cannabis dispensary appears dubious given the customer’s limited operations.
Leadership & Shareholder Concerns
- Founder and CEO David Michery has a history of failed penny stock companies, with multiple entities having securities registrations revoked or terminated by the SEC.
- Michery was involved in business with individuals later convicted of securities fraud, and his professional career comprises mainly of entertainment, lacking automotive industry credentials.
- Top shareholders include Terren Peizer, associated with companies that had stock crashes, and Michael Wachs, a convicted bank fraudster controlling substantial voting power in Mullen.
- Shareholder dilution is rampant with a 5x increase in shares outstanding within weeks during early 2022.
Activ8 Finance Analysis
This report underlines significant red flags regarding Mullen Automotive's claims of innovative battery technology and near-term manufacturing capabilities. The discrepancies between the company's projected technological advancements and actual developmental realities raise questions about the credibility of its public statements.
Furthermore, the history of the company's leadership and its major shareholders, documented associations with past failed enterprises, and the absence of critical regulatory certifications for its vehicles suggest operational and governance risks. Investors could benefit from a cautious approach, emphasizing thorough due diligence when considering involvement with entities exhibiting such contentious backgrounds and operational challenges.