Mullen Automotive Inc. (NASDAQ: MULN) (“Mullen” or the “Company”), an emerging electric vehicle (“EV”) manufacturer, announces 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.
Mullen’s Commercial Vehicle Manufacturing and Assembly in Tunica, MS
FTZ approval now qualifies the Company for a variety of benefits, including deferment of payments on duties related to import fees.
About Mullen
Mullen 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.
Source link:https://news.mullenusa.com/
