President Donald Trump imposed 25% tariffs on imported vehicles and parts, shaking up the entire electric vehicle industry. However, U.S.-based EV companies are said to be poised to benefit from these actions as they capitalize on a surge in domestic demand and reduce competition from imported models.

Meanwhile, Mullen Automotive (MULN) is setting its sights on Tesla (TSLA) and other rivals by leveraging U.S.-made auto parts. With the company’s claim that 100% of its commercial vehicle inventory is assembled domestically and a significant portion of its components are sourced from U.S. suppliers, Mullen is appealing to the surge in domestic demand.

Mullen recently confirmed that its commercial vehicle inventory, developed with subsidiary Bollinger Motors, is entirely assembled in the United States. The company sources 67% to 71% of its components domestically, ensuring tariff exemptions and supporting stable pricing. This strategic move aims to capitalize on rising U.S. demand and mitigate global trade uncertainties, positioning Mullen to potentially undercut competitors reliant on imported parts

Although Mullen aims to boost product quality and capture market share from its beleaguered competitor, questions arise. 

Should you consider buying shares now? Let’s find out the answer.

About Mullen Stock

Valued at a small market cap of $65,000, Mullen Automotive is an American electric vehicle manufacturer focused on developing and marketing EVs across multiple segments, including passenger cars, commercial vans, and fleet solutions. The company has drawn attention to its ambitious product pipeline, which includes the Mullen FIVE crossover SUV and various electric cargo vans. 

Mullen Automotive’s stock has undergone a devastating collapse over the past year, shedding nearly 100% of its value over the past 52 weeks. This reflects a near-total erosion of shareholder value. 

Expansion of Manufacturing Facilities

​Mullen Automotive is significantly enhancing its U.S. manufacturing capabilities to meet the rising demand for electric vehicles. The company plans to expand its Advanced Manufacturing and Engineering Facility (AMEC) in Tunica, Mississippi, from 124,000 to over 1.2 million square feet, accommodating the production of Class 1 and Class 2 EV cargo vans and the Mullen FIVE EV Crossover. In battery production, Mullen is consolidating operations by relocating its Monrovia, California pilot facility to a new high-energy facility in Fullerton, California, capable of producing 1 gigawatt-hour annually. This Fullerton site will focus on developing next-generation American-made EV battery packs. Additionally, Mullen is dedicating its Mishawaka, Indiana facility to house multiple battery production lines, aiming for a capacity of 108,000 battery systems per year. The company has already invested $12 million in battery development and plans an additional $43 million to bolster U.S. production capabilities.

What Could Go Wrong for Mullen?

The risks for Mullen Automotive are substantial under its dramatic slide. The company is not generating sufficient revenue and remains unprofitable, forcing it to rely heavily on capital raises that have diluted shareholder equity by over 90% in recent rounds. Net losses have reportedly exceeded $100 million in recent quarters, and production targets have missed expectations, raising serious concerns about its ability to scale.

The company disclosed a working capital deficit, and issued a going concern warning as recently as its last quarterly report. 

Lastly, as a penny stock trading below $1, Mullen must raise its price above that level to meet Nasdaq’s minimum listing requirements, or it risks delisting.

The Bottom Line on MULN Stock 

While Mullen remains focused on leveraging U.S.-made parts to secure a competitive edge, addressing its financial challenges is crucial for stabilizing and regaining momentum in the market.

Despite its U.S.-based production, this EV company lacks solid catalysts as its financials remain weak and it is heavily reliant on debt and equity raises. Moreover, if Trump relaxes the current tariff policy, which seems possible given mounting global pressure, the competitive edge provided by U.S.-based production could vanish.

For now, it appears wise to stay away from this highly volatile, hard-hit penny EV stock.