Investors Pile into the Accelerating Electric Vehicle Market

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NEW YORK, Aug. 11, 2020 /PRNewswire/ — Since 2013, the sale of electric vehicles (EV) in the United States has grown by an average of 25% a year (, a stunning figure when compared to the anemic 1.4% overall growth of the US auto market over the same interim. Despite the stellar growth rate, EV sales only account for a miniscule 2% share of the US automobile market but are projected to exceed 20% of annual vehicle sales by 2030. With a tenfold increase in market share expected over the next decade, market penetration has just begun, and there’s clearly still enormous upside. In a bold foray into the electric vehicle market, Net Element Inc. (NASDAQ: NETE) (NETE Profile) recently announced the execution of a definitive merger agreement to merge with Mullen Technologies Inc., a Southern  California-based EV company. Mullen currently has seven retail locations in California, one in Arizona, and expects to launch a luxury sports car in the first half of 2021. With leading EV brands such as Tesla, Inc. (NASDAQ: TSLA),Nikola Corporation (NASDAQ: NKLA), NIO Inc (NYSE: NIO) and Workhorse Group Inc. (NASDAQ: WKHS) driving consumer interest within the segment, Net Element looks to capitalize on the growing fervor for high-quality electric vehicles and drive shareholder value. One look at the sporty, luxurious Dragonfly K50 indicates that NETE is on the right path. 

  • Net Element Inc. and Mullen Technologies Inc. executed a definitive agreement to merge on August 5th 2020 and is currently pending shareholder and NASDAQ approval. 
  • The electric vehicle market is set to grow to 56 million vehicles per annum by 2040, rising from a mere 2 million per annum today 
  • By focusing on electric SUV’s and solid-state battery technology, Net Element & Mullen Technologies have carved out an attractive and unique consumer niche for their product

Net Element Inc. (NASDAQ: NETE) (NETE Profile)’s legacy business model has been firmly centered within the Fintech space, with the company operating a payments-as-a-service transactional model and value-added services platform for small to medium enterprises in the U.S. and selected emerging markets. Net Element has plans to divest itself of its payments processing business and portfolio to transform the company into a pure-play electric vehicles manufacturer going forward. 

“We feel, after considering an array of strategic alternatives, that the agreement with Mullen provides our shareholders with the most compelling opportunity,” said Net Element chairman and Chief Executive Officer Oleg Firer. “We conducted an extensive search of companies that have disruptive technologies and believe that Mullen represents the best path forward. COVID-19 has created a unique set of challenges for our payment processing business, as many of our payment processing customers are located in the Northeast, which has been hit especially hard by the coronavirus. We expect that the merger with Mullen will create a new path forward that should reward our long-time shareholders.” 

Electric Vehicle Manufacturing Plant 

Unusual for an industry segment where most carmakers sink in billions of dollars in EV start-up investments, Mullen Technologies expects to spend less than $400 million and take only 24 months prior to bring its initial electric vehicles to market. To this end, Mullen extended its letter of intent with the West Plains Airport Authority dba S3R3 Solutions and executed a letter of intent with Axiom Financial for $135 million for the funding to acquire and build out the electric West Plains plant.  The Company expects to begin production by 2022 and enter the electric Sport Utility Vehicle (SUV) market with the launch of the MX-05, a mid-size luxury SUV that will be featured as a battery electric vehicle. Mullen has created a different business model to enter the EV market with core tenants that include: fast-to-market, highly efficient, ready and proven initial platform leveraging an existing vehicle and designed for global market needs (development reduced from 4 years to 24 months), and complemented with a portfolio of competitively priced vehicles in the fast-growing Electric SUV segment.

Once complete, Mullen Technologies expects to begin using the West Plains facility to manufacture and assemble its revolutionary Dragonfly K50 electric sports car.  Initially featured at the New York International Auto Show in April 2019and winner of the Governor’s Choice Award at the 2019 Balboa Bay Club’s Classic Auto Show, the K50 has been designed in conjunction with Mullen’s partners at CH-Auto.  With over 1,000 vehicles already sold in China following its launch in August 2019, Mullen expects to begin retailing the car in the United States during the first half of 2021.  

Following in Tesla’s footsteps

In the interim and ahead of the launch of its West Plains facility, Mullen Technologies has pursued a number of avenues in raising the required capital needed for the project, including seeking an Advanced Technology Vehicles Manufacturing loan from the U.S. Department of Energy.

“It’s a loan program for vehicle technologies that get better than the median or average miles per gallon,” explained Todd Coleman, executive director of the West Plains Public Development Authority. 

Notably, the Department of Energy’s loan program was also initially used by Tesla, with the company being granted a $465 million when they were first getting started in early 2010, and has also been availed of by carmakers such as Ford Motor Co and Nissan North America.

The Booming Electric Vehicle Market

According to BloombergNEF’s Electric Vehicle Outlook report published last year, electric vehicles are set to make up for more than half of global passenger car sales by 2040, with passenger EV sales to rise from 2 million worldwide in 2018 to 56 million by 2040. Meanwhile, conventional passenger vehicle sales are expected to more than halve to 42 million by 2040 from 85 million today. 

Whilst the growth of the EV market has been predicted to lead to a marked reduction in automobile emissions – with Bloomberg foreseeing a reduction in gasoline and diesel demand by an estimated 13.7 million barrels per day within the next decade—it is also set to drive a surge in demand for lithium-ion batteries, which will rise from 151 gigawatt-hours (GWh) in 2019 to 1,890 GWh by 2030 ( Inevitably, the exponential growth rate projected for the use of lithium-ion battery technology is also set to lead to a huge and simultaneous expansion in the mining of cobalt, nickel and lithium – key raw materials used in the manufacture of lithium-ion powered batteries – which in turn have led to rising concerns of the environmental impact resulting from the mining activities.  

Mullen’s Environmentally Friendly (and Powerful) Automotive Solution

Mullen Technologies has sought to address these concerns ahead of the launch of its flagship MX-05 SUV, a fully electric mid-sized luxury SUV which will be launched as the carmaker’s flagship car model by the 2022. Designed to capitalize on the surge in demand for SUV’s and pickups in the United States – sales of which grabbed a record 70 percent of the market in 2019 ( – Mullen’s mid-sized MX-05 will form part of a three-model range which will ultimately include both compact and large-sized SUV options. 

Remarkably, Mullen has chosen to power its electric SUV offering through the use of solid-state battery technology. The batteries, which will provide a significant enhancement in performance relative to the ubiquitous lithium-ion batteries in use by most EV makers today, will allow the vehicles to extend their target range to as much as 640 miles on a single charge (as compared to an average 325 miles for lithium-ion battery powered vehicles) whilst enabling the SUVs to be driven in temperatures ranging from -40 degrees centigrade to 60 degrees centigrade. Most notably, the solid-state batteries will also be fully synthetic, voiding the need for additional mining of natural resources and further reinforcing the company’s environmentally friendly credentials.

Electric Vehicle Space Sees Deluge of Investor Interest

A common denominator for the U.S.-listed automotive sector thus far in 2020 has been the share price performance of electric vehicle manufacturers relative to their more conventional counterparts. Tesla, Nikola Corporation, NIO Inc. and Workhorse Group have all seen their market values rise by over 100 percent over the first half of the year with Tesla recently usurping Toyota to become the world’s most valuable automaker – in spite of the electric car maker only delivering 367,500 electric vehicles in 2019, less than 4 percent of Toyota’s total (

Through its planned merger with Mullen Technologies, Net Element expects to join this select group as institutional investors and market participants compete to gain earlier access to the disruptive corporations which are rapidly changing the state of the global automobile market. Following its merger, Net Element will focus on the US electric SUV market, which has been forecast to grow to an addressable market size of $38 billion by 2026, representing an annualized growth rate of 40 percent according to consultancy IHS Markit (

With the company’s management targeting the production of an aggregate 75,000 electric SUVs by 2025, accounting for an estimated 3% of total forecast US electric SUV sales volumes, Net Element’s future revenue growth and earnings potential seem to be extremely promising. 

EV Industry Sees Accelerating Growth Momentum

Investors have driven an influx of capital into the electric vehicle space, focusing on pure-play electric vehicle companies unencumbered by a legacy automotive business. In particular, investors have focused on companies who have been able to consistently grow their vehicle volumes or who have been able provide prospective electric vehicle solutions to niche segments within the wider economy.

Tesla, Inc. (NASDAQ: TSLA), currently the most valuable automotive company in the world by market cap, has seen its product offering expand in recent years beyond its flagship Model S sedan and the falcon-winged door Model X sports utility vehicle to the simpler mid-sized sedan, Model 3 and its crossover utility vehicle, the Model Y. Tesla delivered 367,500 electric vehicles in 2019, an increase of 50% year-on-year, and has stated that it has the installed capacity to exceed 500,000 vehicle deliveries in 2020. 

Nikola Corporation (NASDAQ: NKLA) focuses on the development of smart transportation and is the only pure-play hydrogen powered vehicle company listed in the U.S. Since its listing on June 11, 2020, the company has seen its share price more than double, with investors touting Nikola Corporations’ potential to become a global leader in manufacturing zero emissions heavy duty battery-powered and hydrogen-electric trucks. 

NIO Inc. (NYSE: NIO) is a U.S.-listed, Chinese electric carmaker which has been one of the global pioneers within the electric SUV space, through the launch of its ES8 model in December 2017 followed by its compact SUV offering, the ES6 in late 2018. NIO delivered 31,913 vehicles in 2019 ( and has delivered 10,429 vehicles thus far this year (as of end-May 2020). 

Workhorse Group Inc. (NASDAQ: WKHS) is a technology company focused on manufacturing drone-integrated electric vehicles directed towards the last-mile delivery sector. The company has previously signed agreements with the likes of UPS ( and Ryder to supply electric delivery trucks and is currently bidding on the US Postal Service’s contract to replace their existing fleet of trucks ( Workhorse also owns a 10% stake in Lordstown Motor (LMC), which has recently unveiled the Endurance, a line of all-electric pickup trucks.

A Bright Future

US equity investors have been focused on rewarding pure-play electric vehicle companies which are able to capitalize on the explosive growth in EV demand whilst forgoing the distraction of a pre-existing conventional automotive business. Following its planned merger with Mullen Technologies, Net Element seems poised to catapult itself into the select tier of listed EV manufacturers in the United States – and if it is able to execute on its plan to manufacture an aggregate 75,000 electric SUV’s by 2025, the company will firmly establish its place as one of the largest pure-play electric vehicle manufacturers in the world. 

“We believe the timing of this merger is ideal for Mullen Technologies,” said Mullen Technologies CEO and founder David Michery. “We look forward to working with the Net Element team to complete the merger as quickly as possible.”

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