Mullen abandons passenger EV development to focus on commercial vehicles
Commercial EV manufacturer Mullen Automotive Inc. is laying off roughly 70 people, executives announced October 7, which amounts to about 20% of the company's head count. The reduction is part of a plan to curtail overall spending as CEO David Michery and his team focus on “near-term” commercial revenue generation.
Along with the layoffs, Mullen will discontinue its passenger vehicle program, which includes the Mullen Five, Five RS, and Mullen GT models. These vehicles had not yet entered production as the company focused on its commercial offerings: a low cab, cargo van, and utility vehicle. Last month, the company’s Bollinger Motors division celebrated the start of production of its Class 4 electric chassis trucks in Michigan.
According to a company filing, Michery and his team expect to bring in approximately $75 million in revenue over the next six months—a big jump from $4.5 million last quarter. Mullen has worked down its monthly expenses to an average of $12.7 million in the third quarter from $18.1 million in the first three months of this year, but executives are looking to lower that to $7.3 million in short order.
See also: Mullen announces $150M financing commitment
Furthermore, the plan involves moving to a smaller footprint by subleasing some space and ending some leases. Mullen owns manufacturing plants in Mishawaka, Indiana, as well as Tunica, Mississippi, but also leases its corporate headquarters in Brea, California; its development center in nearby Irvine; and office space in Troy, Michigan.
Looking forward, Mullen's leaders expect that, alongside continued operating reductions, the company will hit a break-even cash flow by December 2025.
News of the cost-cutting plan lifted Mullen’s stock (Ticker: MULN) by 4% to $2.61 on October 7. Over the past six months, however, the stock has slid from more than $400 and lost 99% of its value. Its market capitalization is now about $4 million.
