U.S. Department of Commerce Approves Mullen’s Tunica, Miss., Facility as Foreign Trade Zone
May 09 2024 - 9:00AM
via IBN -- Mullen Automotive, Inc. (NASDAQ: MULN) (“Mullen” or the
“Company”), an electric vehicle (“EV”) manufacturer, announces
today the Company has been approved for Foreign Trade Zone (“FTZ”)
status with the U.S. Department of Commerce for its commercial
vehicle manufacturing and assembly center located in Tunica,
Mississippi. A copy of Mullen’s FTZ approval can be found here.
With FTZ approval, the Company now qualifies for a variety of
benefits, including deferment of payments on duties related to
import fees. For domestic U.S. sales, the Company is now able to
match import duty payment to when vehicles are shipped from the
zone. This key FTZ benefit reduces the pressure on cash flow which
is significantly different from the previous model of paying duty
at time of port entry. Mullen estimates that resulting deferred
working capital on domestic sales could result in deferred outlays
of up to $21 million for FY2024 and FY2025.
For international sales, the Company is now 100% exempt from
duties and taxes owed on vehicles exported, returning a bottom-line
pick-up of up to 27% on vehicle kits and 11% on vehicle batteries
for a blended average of 20% on the full duty cost associated with
both Class 1 EV cargo vans and Class 3 EV trucks.
“Foreign Trade Zone approval for our Tunica facility is a
significant milestone for us, further strengthening our
manufacturing position while delivering a competitive advantage and
cash flow saving opportunities,” said David Michery, CEO and
chairman of Mullen Automotive. “This approval also helps the
overall economic development of the local Tunica, Mississippi,
community.”
Mullen’s FTZ benefits now include:
- Enhanced global competitiveness
- Reduction of taxes and fees
- Increased logistics flexibility
- Relief from inverted tariffs
- Duty exemption on re-exports
- Duty elimination on waste, scrap and yield loss
- Weekly entry savings
- Duty deferral
- Improved 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 U.S. 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.
About MullenMullen Automotive (NASDAQ: MULN) is
a Southern California-based automotive company building the next
generation of commercial electric vehicles (“EVs”) with two United
States-based vehicle plants located in Tunica, Mississippi,
(120,000 square feet) and Mishawaka, Indiana (650,000 square feet).
In August 2023, Mullen began commercial vehicle production in
Tunica. In September 2023, Mullen received IRS approval for federal
EV tax credits on its commercial vehicles with a Qualified
Manufacturer designation that offers eligible customers up to
$7,500 per vehicle. As of January 2024, both the Mullen ONE, a
Class 1 EV cargo van, and Mullen THREE, a Class 3 EV cab chassis
truck, are California Air Resource Board (CARB) and EPA certified
and available for sale in the U.S.
To learn more about the Company, visit www.MullenUSA.com.
Forward-Looking StatementsCertain statements in
this press release that are not historical facts are
forward-looking statements within the meaning of Section 27A of the
Securities Exchange Act of 1934, as amended. Any statements
contained in this press release that are not statements of
historical fact may be deemed forward-looking statements. Words
such as "continue," "will," "may," "could," "should," "expect,"
"expected," "plans," "intend," "anticipate," "believe," "estimate,"
"predict," "potential" and similar expressions are intended to
identify such forward-looking statements. All forward-looking
statements involve significant risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied in the forward-looking statements, many of which are
generally outside the control of Mullen and are difficult to
predict. Examples of such risks and uncertainties include, but are
not limited to, the nature and extent of benefits the Company may
receive as a result of its Foreign Trade Zone (“FTZ”) status,
whether the anticipated amounts of deferred working capital on
domestic sales will materialize in FY2024 and FY2025, the actual
amount of bottom line pick up that will be achieved for
international sales as a result of the duty exemption pursuant to
the FTZ status and the extent of benefit FTZ status will have
on the Tunica, Mississippi, community. Additional
examples of such risks and uncertainties include but are not
limited to: (i) Mullen’s ability (or inability) to obtain
additional financing in sufficient amounts or on acceptable terms
when needed; (ii) Mullen's ability to maintain existing, and secure
additional, contracts with manufacturers, parts and other service
providers relating to its business; (iii) Mullen’s ability to
successfully expand in existing markets and enter new markets; (iv)
Mullen’s ability to successfully manage and integrate any
acquisitions of businesses, solutions or technologies; (v)
unanticipated operating costs, transaction costs and actual or
contingent liabilities; (vi) the ability to attract and retain
qualified employees and key personnel; (vii) adverse effects of
increased competition on Mullen’s business; (viii) changes in
government licensing and regulation that may adversely affect
Mullen’s business; (ix) the risk that changes in consumer behavior
could adversely affect Mullen’s business; (x) Mullen’s ability to
protect its intellectual property; and (xi) local, industry and
general business and economic conditions. Additional factors that
could cause actual results to differ materially from those
expressed or implied in the forward-looking statements can be found
in the most recent annual report on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K filed by Mullen with the
Securities and Exchange Commission. Mullen anticipates that
subsequent events and developments may cause its plans, intentions
and expectations to change. Mullen assumes no obligation, and it
specifically disclaims any intention or obligation, to update any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as expressly required by law.
Forward-looking statements speak only as of the date they are made
and should not be relied upon as representing Mullen’s plans and
expectations as of any subsequent date.
Contact:Mullen Automotive, Inc.+1 (714)
613-1900www.MullenUSA.com
Corporate Communications:InvestorBrandNetwork
(IBN) Los Angeles, California www.InvestorBrandNetwork.com
310.299.1717 Office Editor@InvestorBrandNetwork.com
- Mullen’s Commercial Vehicle Manufacturing and Assembly in
Tunica, MS
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