MULN stock alert: Mullen announces the launch of an EV supercar
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Shares of Mullen Automotive (NASDAQ:MULN) shares are in the red today, despite the announcement of a new collaboration with the Chinese Qiantu Motors. Qiantu and its affiliates have granted Mullen the North and South American intellectual property and distribution rights to the DragonFLY K50 electric vehicle (EV) under a five-year license agreement. Mullen will also be in charge of vehicle assembly in the Americas.
According to CEO David Michery:
“This agreement with Qiantu is an important milestone for the Company. Not only does this settle a long-standing dispute between our respective companies, but it also provides the opportunity to realize my vision of a supercar that would rival some of the best supercars in the world. From day one, we have received overwhelmingly positive feedback for this vehicle, including our original debut at the 2019 New York Auto Show and the Indy 500 in May 2019.”
Stock MULN: Mullen receives the rights to DragonFLY K50
Qiantu’s vehicle is currently available on Ali Baba (NYSE:BABA). It is priced at $122,000 for one to nine units and $111,111 for more than 10 units. Mullen did not immediately reveal his selling price for the K50, which he plans to rebrand as Mullen GT and GTRS.
A Redditor notes that the vehicle has been on Mullen’s website since 2018, showing a range of 236 miles and an electronically limited top speed of 125 mph. In Mullen’s announcement, the company added that the K50 will have an updated powertrain to target a top speed of over 200 mph and a 0-60 mph acceleration time of under two seconds.
The K50 is similar to Mullen’s GO, formerly called I-GO, in that both vehicles are from China. Nevertheless, Mullen will have to modify and redesign the K50 in order to meet US homologation requirements and customer expectations. The changes will be “consistent with Mullen’s vehicle design language currently found in the Mullen FIVE and Mullen FIVE RS”.
In exchange for the rights to K50, Mullen agreed to pay Qiantu $6 million. Mullen is also obligated to purchase Qiantu’s vehicle kits and will provide the company with warrants to purchase up to 75 million shares of MULN. In addition to this, Mullen will pay Qiantu “$2,000,000 for deliverables under the IP agreement” and a royalty of $1,200 for each licensed vehicle sold in the Americas throughout the five-year period. years.
As of the date of publication, Eddie Pan held a LONG position in BABA. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.