Mullen Automotive, Inc. (NASDAQ: MULN), an emerging electric vehicle (EV) manufacturer, has recently been granted Foreign Trade Zone (FTZ) status for its manufacturing and assembly center in Tunica, Mississippi, by the U.S. Department of Commerce. This significant development is poised to bring substantial financial advantages to Mullen, including the potential to defer up to $21 million in duty payments for the fiscal years 2024 and 2025. The FTZ status offers a strategic benefit by allowing Mullen to delay duty payments on imported materials until their products are sold in the U.S. market, thereby easing cash flow pressures. Additionally, for vehicles that Mullen exports, the company will enjoy a complete exemption from duties and taxes, which could enhance its profit margins by an average of 20% on the full duty cost for its Class 1 EV cargo vans and Class 3 EV trucks.
David Michery, the CEO and chairman of Mullen Automotive, has underscored the FTZ approval as a pivotal achievement for the company. This approval not only bolsters Mullen’s manufacturing capabilities but also provides a competitive edge in the rapidly growing EV market. Furthermore, the FTZ status is anticipated to have a positive impact on the economic landscape of Tunica, Mississippi, by potentially creating more jobs and fostering local development. This aligns with Mullen’s broader goals of contributing to economic growth while advancing its position in the EV industry.
The benefits of the FTZ status extend beyond financial incentives. They include a range of operational advantages such as increased competitiveness on a global scale, reductions in taxes and fees, and enhanced logistics flexibility. These benefits collectively support Mullen’s strategic objectives by improving its global supply chain performance and providing relief from inverted tariffs. The FTZ status also allows for duty exemption on re-exports and eliminates duty on waste, scrap, and yield loss, further optimizing Mullen’s manufacturing efficiency.
Mullen Automotive operates two vehicle plants in the U.S., located in Tunica, Mississippi, and Mishawaka, Indiana. The company initiated commercial vehicle production in Tunica in August 2023 and has since achieved significant milestones, including receiving IRS approval for federal EV tax credits for its commercial vehicles in September 2023. As of January 2024, Mullen’s commercial vehicles, the Mullen ONE and Mullen THREE, have received certification from the California Air Resource Board (CARB) and the Environmental Protection Agency (EPA), marking them ready for sale in the U.S. market. This progression underscores Mullen’s commitment to expanding its footprint in the EV sector and its capability to meet stringent environmental and regulatory standards.To learn more about MULN, visit the company’s website at https://mullenusa.com.Receive IBN Spotlights – “Bite Size” Small, Mid and Large-Cap Technical Indicator Alerts
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