Mullen Automotive (NASDAQ: MULN) stock price is roaring back even as other electric vehicle (EV) stocks like Rivian and Lucid Motors plunge. It has soared by over 200% from its lowest point this year and is now hovering at its highest point since March. 

Still, Mullen’s shares have plunged hard in the long term as it retreated by almost 100% in the past 12 months, bringing its market cap to about $99 million. It has also dived by over 50%, underperforming popular companies like Tesla and Lucid Motors.

Mullen Automotive, a small EV company has made several important announcements recently. The company announced that it received an HVIP approval in California that makes its vehicles significantly cheaper to buy.

The approval means that customers can now pay just $16,000 for a truck with an MSRP of $68,500 when you consider the federal tax credit. As a result, there is a possibility that more companies will start buying these trucks since they cost less than diesel ones.

The other important news came out this week after the board backed a Rights Plan that is intended to promote the fair and equal treatment of all shareholders. In its statement, the company said that the agreement means that it will punish anyone who buys up to 10% of the shares without approval

Meanwhile, Bollinger Motors, a company that Mullen acquired in 2022, reached a deal with Amerit Fleet Solutions. That partnership means that Amerit will provide service and warranty for Bollinger’s vehicles. Amerit has previously reached agreements with firms like ChargePoint and Blink Charging.

Most importantly, Mullen Automotive has continued to ramp up production. In April, the company reached the milestone of manufacturing 500 vehicles at its Mississippi plant. In its announcement, the company also said that it would expand to Europe, where it expects to sell 800 trucks this year.

The challenge for Mullen is that it is facing the problems that other EV companies are going through. In its case, it is burning substantial sums of money, a situation that is not expected to change any time soon even with its announced cost-cut plans.

The most recent results revealed that Mullen had a net loss of over $63 million, an improvement from the $378 million it lost in the same quarter a year earlier. It ended its Q4 with about $89 million in cash, meaning that it may need to raise additional capital soon.

Therefore, the company’s earnings, which are expected on May 15th, will provide more colour about its cash burn and its revenue growth. 

MULN chart by TradingView

MULN stock price has rebounded in a high environment. On Wednesday, it had a volume of over 23.2 million, which was higher than the average daily figure of 3.9 million. The stock has risen slightly above the 25-day Exponential Moving Average (EMA).

Meanwhile, the Average Directional Index (ADX) has risen to over 30, signaling that the stock has a bullish momentum. The same is true with the Relative Strength Index (RSI), which has risen to about 63.

Therefore, I suspect that the stock’s surge will be short-lived as we have seen before. If this happens, the MULN share price will likely retreat and retest the support level at $5.0.

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