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Mullen Automotive’s stock price has been in a steep decline over the past few months, mirroring the broader downturn in the EV sector. MULN stock recently hit a low of $0.2033, a staggering drop of over 99% from its all-time high, reducing its market cap to just $101 million—a sharp fall from its peak valuation of over $1 billion.
The entire EV market has been under pressure lately. Even Tesla, the industry leader, has seen its stock fall from over $400 to around $180, with its market cap shrinking from over $1 trillion to about $577 billion. Other EV companies like Polestar, Nio, Xpeng, Li Auto, and Quantumscape have also experienced declines of more than 50%.
In addition, some smaller EV companies have started filing for bankruptcy. Mullen Automotive recently acquired Electric Last Mile Solutions (ELMS) after the company went bankrupt. Similarly, Arrival, a UK-based EV firm, has warned that it might soon run out of cash.
The outlook for Mullen is concerning. The company is rapidly burning through cash and has repeatedly missed its vehicle delivery deadlines. In January, Mullen announced it would begin delivering its cargo fleets in the second quarter of this year, but we are now in the fourth quarter, and deliveries have yet to start. The company also promised to begin delivering vehicles to DelPack Logistics in November, but as the month comes to a close, there have been no updates on these deliveries.
Mullen’s stock price also reacts to its investments in solid-state batteries, a technology that is still years away from being fully developed. The question remains whether Mullen will have the financial resources to continue this development. With the stock price plummeting, raising additional funds by selling shares will be challenging.
Given the collapse of other EV companies, it’s possible that Mullen could be next. However, it’s worth noting that Mullen has shown some volatility, similar to how GameStop did in the retail industry. This means that sudden spikes in the stock price are possible, as I mentioned last week.
The daily chart reveals that Mullen Automotive’s stock has been in a pronounced downtrend, with elevated trading volume. The Average True Range (ATR), a measure of volatility, has decreased, and the stock is trading below its 25-day and 50-day moving averages.
In the near term, the stock is likely to continue its decline. If this trend persists, the next key support level to watch will be $0.15. Conversely, a move above the resistance level at $0.25 would challenge the bearish outlook.