Seeking Alpha • Aug 09
Mullen: Well Positioned For The Solid-State Battery Race
All eyes are on Mullen's battery technology, which is arguably one of the biggest, if not the biggest, catalyst.
Mullen announced very impressive solid-state polymer battery test results (testing was conducted at Battery Innovation Center, a leading institution supported by renowned universities, government agencies, and commercial enterprises).
When scaled to the vehicle pack level, a 150-kilowatt hour solid-state battery is expected to deliver more than 600 miles of range on a full charge.
Solid-state batteries offer higher energy density, faster charging time, smaller size, and safety compared to traditional lithium-ion cell used by the likes of Tesla.
On August 4, Mullen's CEO revealed that the Mullen Energy facility in Monrovia will be in a position to produce 30,000 packs per year. This is huge. He also added that if a deal in the works goes through, it will be "a first of its kind" and will "tip the entire EV space on its head".
Mullen Automotive (MULN) is at a key inflection point. The company is involved with some groundbreaking initiatives that, if they come into fruition, will change the EV (electric vehicle) landscape (and of course produce outsized returns for shareholders). One thing is certain; there are many exciting things happening at Mullen, all within a very short period of time. And the positive catalysts keep on adding up; from the Mullen Five and cargo van orders to impressive battery test results and deals with OEMs (Original Equipment Manufacturers).
Please note: all dates in this article are for 2022 unless otherwise stated.
All eyes are on Mullen's battery technology, which is arguably one of the biggest, if not the biggest, catalyst. On 31 May, Mullen announced very impressive solid-state polymer battery test results. The testing was conducted at BIC (Battery Innovation Center) in Indiana, a leading institution supported by renowned universities, government agencies, and commercial enterprises. In other words, we have a credible, world-class institution validating Mullen’s technology. Importantly, results were also in line with the previous test results conducted at EV Grid. In other words, we have a double confirmation of Mullen’s technology. The doubters argued that EV Grid was not the most credible institution to conduct the tests. So, David Michery, Mullen’s CEO, wanted to reassure the investment community by conducting the tests at BIC as well. Let's call it a sanity check. Mission accomplished; Mullen passed by going through multiple intense testing sessions from accredited testing facilities. In fact, the test data collected from both EV Grid and BIC have exceeded the expected test tolerance and show an impressive future for solid-state batteries. The President and CEO of BIC Mr Ben Wrightsman stated:
We are pleased to see that the results from ongoing testing are in-line with those previously notated...the cell thus far has performed as stated, and we will continue to test additional parameters to characterize the overall capabilities and performance.
Why is this important?
When scaled to the vehicle pack level, a 150-kilowatt hour solid-state battery is expected to deliver more than 600 miles of range on a full charge. I think we can all agree that 600 miles of range is appealing, in line with conventional vehicles running on gas and diesel. This is game-changing news. The battery test results imply greater mileage and faster charging time, and Mullen is well-positioned to become a notable player in both the energy as well as EV space.
What about the traditional lithium-ion cell batteries used by companies like Tesla?
In general, solid-state batteries offer higher energy density, faster charging time, smaller size, and safety compared to traditional lithium-ion cell (we have seen the videos of lithium-ion cell batteries catching fire). In other words, Mullen will be ahead of Tesla (TSLA) on the battery front, believe it or not.
What about the competition?
We are still in the beginning of the global battle for solid-state battery leadership. Mullen has a nice head start compared to many and it’s important for the company to accelerate its efforts, especially given the impressive aforementioned battery test results. Now is the time to double down.
As mentioned above, range, charge and safety risks are the biggest challenges of lithium-ion batteries. Solid-state battery technology is here to resolve these issues. Many big firms have already made moves including Toyota which is the leading holder of solid-state battery patents. But Mullen has a good fighting chance. It is evident that the solid-state battery technology is the next big thing. Even high-profile investors, including Mark Cuban of Shark Tank, have recently invested in the space.
Unfortunately, competition will get more intense. Fortunately, Mullen has the balance sheet strength to progress its battery to the vehicle pack level, after securing an additional $275M in funding following its annual stockholder meeting on 26 July. In fact, Mr Michery dropped big news during his recent Benzinga interview on 4 August. The market has yet to digest the news. Mr Michery mentioned the following about a big deal he is very confident about:
We're talking to a ton of attorneys, accountants, auditors. If we accomplish this, which I believe we will, and we will have an 8-K/Press Release that will come out in the very near future. And if this completes, this will be a first of its kind, we are going to tip the entire EV space on its head
He gave us a hint though. The Mullen Energy facility in Monrovia will be in a position to produce 30,000 packs per year. This is huge.
In the same interview, Mr Michery also gave as a brief update on the major Fortune 500 customer order regarding its electric cargo vans. He reiterated that they have been working for more than 1 year on this deal, and the customer (telecommunications provider in the Southeastern part of the U.S.) has reported they are pleased with the performance. The customer requested certain van modifications in support of their anticipated use. The van was picked up by Mullen and modified to fit the specs requested by the customer, including an upgrade to an 80-kWh battery pack. The van is now in the final testing phase and if everything goes well there will be a vehicle purchase order. In other words, everything is on track. It is healthy for a business relationship to have some back-and-forth, especially before a sizeable deal is concluded. The fact that the customer requested specific modifications shows there is serious intent. In addition, Mullen is planning to add some additional tech features to its vehicles and make some aesthetic improvements to have the most appealing vans out there, as Mr Michery stated. Also, in addition to the Fortune 500 order, Mullen signed a binding agreement with DelPack Logistics, an Amazon Delivery Services Partner, for up to 600 Class 2 EV cargo vans over the next 18 months (the first 300 vans can be delivered by 30 November at the request of the customer). Investors can expect more orders in the coming months. To this end, Mullen is on a hiring spree and ramping up production. We are still in the very early stages of possibly a great success story.
Talking about expansion, on 1 August, Mullen announced the opening of a new Automotive Development Center (16,000-square-foot facility) in Irvine, California, located in the heart of Irvine’s technology corridor and in close proximity to the Irvine Spectrum Center, in support of Mullen’s expanding automotive team. As Mullen continues to grow and expand its corporate footprint, various teams are being strategically split between the Mullen Monrovia and Irvine locations. Specifically, Battery, Powertrain, Thermal, and Infotainment teams will be located at the High-Voltage Facility in Monrovia, California and the Irvine Automotive Development Center will be home to the Engineering Design and Development, Styling, Program Management, Marketing, and Finance teams.
In addition, on 3 August, announced the opening of a new EV Technology team, focusing on developing EV technologies for Mullen’s portfolio of commercial vans. The team will be based in Detroit and will be home to a new division of engineers and technology developers focused on Mullen’s Class 1 – 5 commercial vehicle development. This “Detroit Tech Center” and its EV Technology team will play an important role in Mullen’s goal of developing highly efficient EV technology that utilizes less energy consumption while offering greater vehicle ranges/power. Mullen has already brought on close to 20 new hires and expects to have upwards of 50 employees by year end. The Detroit Tech Center will be the 5th location opened by Mullen. To summarize, at the time of writing, Mullen facilities include:
Detroit Tech Center in Pontiac, Michigan
Irvine Automotive Center, located in Irvine, California
Advanced Manufacturing and Engineering Center based outside Tunica, Mississippi
Mullen’s High Voltage facility located in Monrovia, California
Mullen’s Corporate Headquarters based in Brea, California.
It is evident that Mullen is scaling up rapidly. Now is the make-or-break moment. Mr Michery commented:
Detroit is a natural spot for us for all the right and obvious reasons. A majority of our current partners are based in Detroit, so opening this center made perfect sense for our ongoing and future commercial van development... It is great timing for us as many of the other EV companies are reducing their teams, and we are growing at a rapid rate.