EV maker Mullen is making big cost cuts, moving away from the consumer market

MW EV maker Mullen is making big cost cuts, moving away from the consumer market

By Tomi Kilgore

Job cuts were not mentioned, but the company said it has also initiated significant 'consolidation measures'

Shares of Mullen Automotive bounced Monday off a record low, after the troubled electric vehicle maker said it has started making "significant" cost cuts, as it changes its focus on its commercial EV business given weakness in the consumer EV market.

The company said the cost cuts and consolidation measures are expected to cut operating and investing cash flow expenses by a total of $170 million over the next 12 months.

"Our refined business operational focus will improve our financial results and allow us to take advantage of current market opportunities while also driving long-term growth and shareholder value," said Chief Executive David Michery.

The stock (MULN) climbed 1.8% in morning trading, after closing at a split-adjusted record low of $4 on Friday. It has undergone three reverse stock splits over the past year, that effectively multiplied the stock's price by a total of 22,500.

While Mullen didn't mention layoffs in Monday's release, the company said it was aligning its budget to current "challenging" market conditions and "significantly curtailing" noncommercial EV programs. The company also said it was planning on an "integration" of its Troy, Mich. and Irvine, Calif. engineering centers.

The company did not immediately respond to a request for comment.

Mullen said over the 12 months through Sept. 30, 2023, operating expenses were $179 million and investing cash flows were $108 million. The actions that company are taking would reduce operating cash flows by $69 million and investment spending by $101 million over the next 12 months.

The company said it was making the cost cuts and changing its focus at a time when "the consumer EV sector and overall market has proved challenging."

Mullen's stock has tumbled 71.5% year to date through Friday, while the Global X Autonomous and Electric Vehicles ETF DRIV has slipped 0.6% and the S&P 500 index SPX has gained 9.1%.

-Tomi Kilgore

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April 08, 2024 10:01 ET (14:01 GMT)

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