Mullen (MULN) News: FTZ & CBP Filings + New Sales Team

Mullen Automotive, Inc. (NASDAQ: MULN) (“Mullen” or the “Company”), an electric vehicle (“EV”) manufacturer, announced today the Company has filed for Foreign Trade Zone (“FTZ”) status with the U.S. Department of Commerce at its commercial vehicle manufacturing and assembly center located in Tunica, Mississippi. Mullen filed its application on March 25, 2024, and expects final determination within 30 to 90 days. The company also updated its CBP application.

Upon approval as a designated FTZ site, Mullen would qualify for a variety of benefits including deferment of payments on duties owed related to import fees. With FTZ approval the Company would be able to align duty payment to vehicles sold so the pressure on cash flow would be dramatically inverted from the current model of paying duty at time of import. Upon approval, Mullen estimates that resulting deferred working capital on domestic sales could result in deferred capital outlays of $10 million for the remainder of FY 2024.

For international sales, the Company would be exempt from duties and taxes owed on vehicles sold, potentially delivering a bottom line pickup of 27% of the import cost associated with both Class 1 EV cargo vans and Class 3 EV trucks.

“Achieving FTZ approval status is an important strategic initiative to further strengthen Mullen’s supply chain management and deliver significant cash flow savings,” said David Michery, CEO and chairman of Mullen Automotive. “As we continue to expand our distribution internationally, the FTZ would provide a competitive advantage with no duties or tariffs paid on sales outside of the U.S.”

Potential FTZ benefits include:

  • Enhanced global competitiveness
  • Reduction of taxes and fees
  • Increase logistics flexibility
  • Relief from inverted tariffs
  • Duty exemption on re-exports
  • Duty elimination on waste, scrap and yield loss
  • Weekly entry savings
  • Duty deferral
  • Improve global supply chain performance

What is a Foreign-Trade Zone?
A Foreign-Trade Zone (FTZ or Zone) is a secure area within the United States where foreign and domestic merchandise is generally considered to be in international commerce and outside of U.S. Customs territory for duty and tariff purposes. Companies that operate in foreign-trade zones can defer, reduce or eliminate Customs duties. FTZs were created by Congress in 1934 to encourage international trade and capital investment in the United States. Zones offer a competitive advantage for U.S.-based operations and attract foreign investment to America by encouraging multinational firms to establish operations in the U.S.

Mullen also announced an update on the U.S. Customs and Border Protection (“CBP”) application for Class 1 EV cargo vans.

On March 5, 2024, U.S. Customs and Border Protection informed Rapid Response Defense Systems (“RRDS”) counsel that a final determination on the ruling request needs to be issued by the U.S. General Services Administration (“GSA”).

Based on CBP advice, Mullen and RRDS are now proceeding with the GSA in order to finalize qualification of Mullen to sell Class 1 EV cargo vans to all branches of the U.S. government.

“Mullen is well positioned to support the U.S. government’s goal of transitioning its fleet to electric vehicles,” said David Michery, CEO and chairman of Mullen Automotive.

Mullen announced new key sales hires who have joined the Company in support of its commercial EV van and truck program.

Tyler Jordan – Senior Director of Commercial Sales
Jordan has more than 13 years of experience driving profitability, growth, and process and program enhancements to service high-volume, multi-million-dollar accounts, leveraging strategic planning and data analysis. During the five years he spent with Merchants Fleet, Jordan was a key contributor to the growth of the Last Mile Delivery segment as both a strategic account executive and manager of the strategic accounts. In his role, Jordan collaborated with many different teams to create scalable, end-to-end processes that proved crucial in landing large strategic accounts such as Amazon, FedEx and UPS.

Matt Nevious – Director of Commercial Sales/Strategic Accounts
Nevious played a pivotal role at Merchants Fleet in the growth and optimization of key accounts, particularly within Amazon Last Mile operations. He spearheaded the development of innovative programs tailored to the unique needs of clients like Amazon and FedEx.

Jacob Frenning – Director of Commercial Sales Mid-Atlantic
Frenning has over 15 years of proven successful sales and leadership experience in automotive service, commercial sales and fleet management. In the past decade, Frenning has held positions in operations, sales, and management, and is passionate about applying these skills to deliver proven sales results. Frenning has strong contacts with fleets and is known for working hard to uncover new opportunities while strategically targeting key accounts and other growth engines.