- NETE transforming into pure-play electric vehicles company through merger with Mullen Technologies
- Reverse merger will allow Mullen stakeholders to acquire majority of newly formed company, accelerating process of Mullen going public
- EV sales growing at 25% per year on average, expected to account for over 20% of sales by 2030
Electric vehicle (“EV”) sales in the U.S. have been growing by an average of 25% per year (http://nnw.fm/B2GRb) – stellar results when compared to the dismal 1.76% drop experienced by the entire industry in 2019 (http://nnw.fm/hwjS2). In a bold move aimed at maximizing shareholder value, Net Element (NASDAQ: NETE) recently announced its plans to divest itself of its payments processing business model and enter into the EV industry by executing a definitive merger agreement with Mullen Technologies Inc., a Southern California-based EV company. With seven retail locations in California and one in Arizona, Mullen plans to expand its operations in the U.S. following the merger by opening a manufacturing plant in West Plains, Washington and launching a luxury sports car – the Dragonfly K50 – in the first half of 2021 (http://nnw.fm/rZInt).
Through the reverse merger, NETE plans to transform itself into a pure-play electric vehicle company, allowing the stakeholders of Mullen, a privately held company, to acquire a majority of the new stock, accelerate the process of taking Mullen public, and catalyze its operations in the United States.
“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 CEO Oleg Firer (http://nnw.fm/ntP1A). “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 vehicles are expected to exceed 20% of annual vehicle sales by 2030 (http://nnw.fm/AZJWX) yet currently account for only 2% of sales at present, indicating that market penetration has barely started. The falling prices of EV batteries, changes in fuel regulations and electric vehicle mandates in countries like China are contributing to market shifts favoring EVs across all markets worldwide. Besides expectations that EVs will account for almost half (48%) of all passenger car sales in China by 2025, they are also expected to dominate municipal bus sales by 81%, commercial vehicle sales at 56%, and 31% of the medium commercial market, according to a report by BloombergNEF (http://nnw.fm/NVmJL).
Current and future projections for the EV market have prompted a deluge of investor interest in the space, evidenced by the superior share price performance of electric vehicle manufacturers when compared to their more conventional counterparts (http://nnw.fm/ZJRKj). Through its merger with Mullen Technologies, Net Element expects to join other institutional investors in gaining early access to the rapidly growing EV market where revenue growth and earnings potential appear to be extremely promising.
For more information, visit the company’s website at www.NetElement.com.
NOTE TO INVESTORS: The latest news and updates relating to NETE are available in the company’s newsroom at http://nnw.fm/NETE
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