Shares of electric vehicle (EV) upstart Mullen Automotive (NASDAQ:MULN) dropped in the late afternoon session on Friday. Earlier today, social media was buzzing about job openings at Bollinger Motors, an EV specialist in which Mullen acquired a controlling interest last September. The decline of MULN stock may reflect the risks associated with Bollinger’s heightened ambitions.
On Bollinger Motors’ website, interested applicants can compete for range of new positions. The earliest posting in the bunch (for Vehicle Controls Manager) was dated Dec. 12, 2022 while the newest (for Manufacturing Director) hit the internet today. Of the 19 positions available, Bollinger posted 10 this week.
Adding intrigue for MULN stock, the positions cover a wide breadth of functionalities, indicating a significant investment in forward ambitions. Mullen notably acquired Bollinger — its first EV acquisition — to propel the company “into the medium-duty truck classes 3-6, along with the B1 and B2 sport utility trucks.”
In summary, the listed positions can be broken down into three main categories: engineering, technical and management. For the first segment, openings for Electrical Engineer Director and HV/LV Systems Engineer reflect a desire for innovation leadership. Next, for the technical component, Bollinger is seeking experts like quality and fabricator technicians.
Finally, the company is searching for a Purchasing Manager and Service Manager, indicating confidence in a long-term viable enterprise. For good measure, Bollinger also wants to fill the Investment Director role, which has a primary goal of driving the “capital raise process for upcoming fundraising rounds.”
Commercial Fleet Route May Bode Well for MULN Stock
On paper, Mullen investing heavily in its commercial fleet ambitions via Bollinger offers upside potential for MULN stock. Fundamentally, delivery-focused EVs may be able to help address the last-mile problem.
For transportation, the last mile refers to the most expensive and time-consuming component of the supply-chain process. However, the greater efficiency of EVs relative to traditional vehicles — especially in stop-and-go urban driving settings — ultimately presents a positive framework for MULN stock and its ilk.
Research regarding the relevance of EVs toward the last-mile problem explains the following, per Sustainable Cities and Society:
“Many a time the [tested] vehicle was able to complete the work tasks stipulated for two working days before the battery needed recharging. What is more, the long travel range after returning to the warehouse convinced the drivers of the EV reliability and allowed them to work with no doubts about EV mobility, despite previously reported concerns.”
With more high-profile enterprises electrifying their fleet, Mullen operates in a relevant, burgeoning sector at the very least. Therefore, the narrative could pan out well for MULN stock.
Viability Concerns Cloud Mullen’s Initiatives
Nevertheless, prospective investors will likely have difficulty diving wholesale into MULN stock, particularly with today’s decline. Many market observers may be spooked by Mullen’s foray into commercial EVs.
For instance, while the company did make headlines for introducing a small-scale urban delivery vehicle to the European market, the backdrop isn’t completely favorable. Although demand in Europe for electric delivery vehicles has grown robustly on a percentage basis, diesel and petrol vehicles still dominate the market.
Mullen doesn’t have the greatest financial profile, either. Capital.com highlights:
“Mullen is a pre-revenue startup in a relatively young market. The company’s liquidity is limited and its timeline to deliver its first vehicles and generate revenues is quite far in the future. This means that its ability to stay afloat until it starts bringing money in is questionable.”
While the rewards for taking a long-odds wager can be astronomical, the consequences for failure are also devastating. With that in mind, investors should approach MULN stock with extreme caution.
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On the date of publication, Josh Enomoto 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.