Mullen Automotive has absorbed yet another fellow EV start-up. Today’s acquisition includes Electric Last Mile Solutions, or ELMS, which filed for bankruptcy in June. Mullen received court approval last week to acquire ELMS’s Indiana manufacturing facility, its inventory of EVs, and all its intellectual property.
Mullen Automotive ($MULN) is a Southern California-based EV start-up founded in 2014 that has set out to deliver affordable EVs built entirely on US soil. Although the company has yet to deliver an EV to the market, it came close twice. First, it tried to bring the fabled Coda EV back from the dead, then struck a deal with Qiantu in China to try to bring the assembly of the Dragonfly K50 to the US.
Following a merger in 2020, Mullen pivoted its strategy once again and honed its focus onto its own ground-up EV model – the FIVE crossover SUV. The start-up surprised us yet again by shifting its production sights elsewhere, claiming a majority stake in Bollinger Motors this past September. It vowed to get Bollinger’s ill-fated B1 and B2 electric trucks into production using some of the cash from its acquisition purchase.
Just over a month later, Mullen Automotive announced an investment in another EV start-up, acquiring Electric Last Mile Solutions and all of its assets, including a large production facility.
Mullen approved for all-cash purchase of ELMS’s business
The EV startup shared that it was approved by the US Bankruptcy Court on October 13 as a Chapter 7 transaction, which includes ELMS’s former production facility in Mishawaka, Indiana. Here is the list of assets acquired in the ELMS purchase:
- All intellectual property (IP).
- All inventory, including vehicles (finished and unfinished), finished goods, part modules component parts, raw materials, tooling (including but not limited to product-specific tooling), and all manufacturing data that is required or reasonably helpful for the assembly of the Class 1 Electric commercial delivery vans and Class 3 Commercial Delivery Cab Chassis.
- Real property located in Mishawaka, Indiana, together with all buildings, improvements, and fixtures.
- All tangible personal property, including equipment, machinery, furniture, supplies, computer hardware, data networks, servers (with data and software), communication equipment, software, discs, and all other data storage media.
With the acquisition, Mullen Automotive procures a production footprint with the capability to produce up to 50,000 vehicles per year. The start-up stated that the acquisition of said factory will allow it to accelerate production of the Mullen FIVE and Bollinger B1 and B2 EVs by 12 months.
Mullen currently operates a facility in Tunica, Missouri, which will now become the company’s commercial manufacturing center, responsible for producing Mullen and Bollinger Class 1 to 6 commercial vehicles. Subsequently, FIVE production will move from Tunica to the newly acquired facility in Indiana. Mullen chairman and CEO David Michery spoke to the cash purchase:
Mullen’s acquisition of Bollinger was one of the largest transactions of its kind in the EV market. Upon closing the ELMS transaction, the company will be in a position to strategically leverage all its acquired assets to shorten its production path and aggressively expand into the commercial and consumer EV market.
Mullen Automotive did not share the purchase price of ELMS in its recent press release, but the start-up reportedly offered over $93 million in cash and other considerations, according to previous court documents. The start-up claims to have access to $275 million to close the ELMS acquisition based upon its cash on hand and “funding commitments” of up to $240 million.
Mullen intends to launch Class 1 to 3 commercial delivery EVs in 2023, followed by the start of FIVE production in 2024.
Electrek’s take
It’s interesting to see Mullen Automotive acquire yet another start-up that couldn’t make it over the scaled production hump. The newly acquired facility could certainly help the start-up answer its own call to destiny in becoming a legitimate automaker, but they still don’t pass the sniff test here at Electrek.
We’d love to be proven wrong. We are by no means rooting against Mullen Automotive. The FIVE and FIVE RS look very cool, but this company remains a mere start-up with some prototypes until it actually starts delivering viable EVs to customers.
Why spend all this money purchasing other technologies from companies instead of using those funds to build your own passenger EVs as planned? Makes you wonder. We totally understand the entry into last-mile and commercial Evs – that segment is absolutely booming. But why now, before successfully scaling a vehicle of its own?
Hopefully, Mullen hasn’t spread itself too thin here financially, especially on the wings of “funding commitments” that make up a large majority of its available funds. Again, rooting for them, but this is definitely a “show, don’t tell” situation.
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