Embattled Mullen Automotive (NASDAQ:MULN) stock is showing no sign of defeat despite a rough environment for electric vehicles (EVs). Yesterday, management announced that it’s testing its integrated solid-state polymer battery pack. While MULN stock is encountering some muted trading on Friday, the real upcoming catalyst for shares could be a brewing short squeeze.
On Thursday morning, Mullen announced that the company is road testing its advanced battery with its Class 1 EV cargo van. Per a press release, the performance study began on Feb. 26 at Mullen’s Commercial Tech Center in Troy, Michigan. Video of the EV equipped with the solid-state battery (SSB) can be found on Mullen’s website.
Through on-road drive cycles as well as dyno testing — a process that “evaluates the torque and rotational speed of an engine” — the EV maker determined that “total pack energy” saw an increase from 42 kilowatt-hours to 72 kWh with the SSB. Mullen notes that the “initial test results met or exceeded all requirements targeted for first drive cycles for energy usage and the driving range.”
Significantly, Mullen also estimates that the range of its cargo van will increase from 110 miles to 190 miles with the help of the SSB.
SSBs Could be a Fundamental Gamechanger for MULN Stock
Theoretically, SSBs could be a massive gamechanger for MULN stock due to the paradigm-shifting potential. As Fast Company noted earlier this year, the advanced battery format represents the “holy grail” of the EV industry. The innovation of SSBs promises “longer driving ranges and shorter charging times than traditional lithium-ion packs.”
Several companies — including Volkswagen (OTCMKTS:VWAGY) in partnership with QuantumScape (NYSE:QS) — have invested many research and development dollars into cracking the code. They have competition from big-league competitors like Toyota (NYSE:TM). Still, while the narrative here is compelling, MULN stock has failed to move on the news today.
That’s because a high magnitude of skepticism covers the subsector. “A lot of promises haven’t been delivered and several automakers and investors have been burnt,” said Rory McNulty of Benchmark Mineral Intelligence to Fast Company.
One of the challenges here comes down to taking the innovation and scaling it for practical applicability. With top-tier enterprises already struggling with this challenge, Mullen likely faces an even steeper climb to success.
Short Squeeze Ahead?
With that said, many retail investors of MULN stock are holding on, and it’s not a completely unreasonable wager. As Fintel points out, Mullen’s short interest stands at 19.77% while the short interest ratio comes in at 2.42 days to cover. This latter stat indicates how long it would take for bearish traders to unwind their short positions based on average trading volume.
These metrics have been notably ticking up. On Feb. 22, Fintel reported that short interest was 14.26% while the short interest ratio sat at only 0.8 days to cover.
Nevertheless, investors considering this angle need to be aware of the risks and the need for timely exits. Since the beginning of 2024, MULN stock has lost more than 45%. In the past 12 months, shares are down more than 99%.
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On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
