Bollinger Looks Forward After Restructuring
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OAK PARK, Mich. — The electric Bollinger Motors B4 work truck has a lot going for it, including a smooth ride, endless customization options, solid battery range and minimal competition in its segment.
But in this increasingly shaky moment for the electric vehicle industry, the Metro Detroit startup faces a deeply uncertain future. It already survived a near-death experience this spring, emerging from a brief stint in receivership that came amid a cash crunch and a federal lawsuit over an outstanding $10 million loan.
Bollinger’s owner, Mullen Automotive Inc., also appears to be living on the edge. The California-based EV company — which recently increased its stake in Bollinger to 95% and committed to pay down its subsidiary’s debts — has racked up hundreds of millions in losses in recent years, faced legal pressure from creditors and shareholders, and is cutting its workforce.
“We’re continuing to press on,” said Jim Connelly, Bollinger’s chief revenue officer, in a recent interview at the company’s office, a few days after it had emerged from receivership. The truck maker that began as “a little chop shop” in New York has been through tough times already, he emphasized, and it has an experienced staff to navigate the current uncertainty around EVs.
“You have to be gritty,” he said.
With the Vehicle Assembly Building in the background, three Canoo crew transportation vehicles for Artemis missions arrived at NASA’s Kennedy Space Center in Florida on July 11, 2023. (Isaac Watson/NASA/TNS)
Bollinger and Mullen aren’t alone as they grapple with a difficult EV market. Many firms were struggling well before President Donald Trump took office, like electric SUV maker Fisker Inc. and bus manufacturer Arrival, which both filed for bankruptcy last year.
More recently, commercial vehicle company Canoo Inc. and truck builder Nikola Corp. also went under. A Wall Street Journal analysis last December found more than a dozen EV-related startups were at risk of running out of cash by this summer. Mullen, for its part, reported having about $2.3 million in cash after the first three months of this year, but its leader said it still has funding sources to tap.
“We were supposed to be out of business a long time ago, but we’re still here,” Mullen CEO David Michery told The Detroit News last week. His goal: just survive until demand for EVs eventually rebounds.
‘Really Tough’
Trump presents a host of new obstacles for EV companies, from higher tariffs to tax policy. He and a GOP-controlled Congress aim to slash emissions requirements, kill funding for charging stations and pull tax credits that have helped juice sales of all types of electric vehicles.
Bollinger has touted a federal commercial vehicle tax credit worth up to $40,000 to help sell its truck. But that credit, along with federal consumer EV tax credits worth up to $7,500 per vehicle, is expected to be eliminated under tax and budget legislation under debate in Congress.
“Everybody that is in business today is hunkering down,” said Ted Brandt, CEO of Marathon Capital, an investment bank focused on clean energy. It’s a “tough fundraising environment” for companies that were riding high just a few years ago, Brandt added, especially as EV demand hasn’t met expectations and as the tax credits are set to go away.
A Rivian R3 prototype crossover electric vehicle. (Kyle Grillot/Bloomberg News)
Even established startups like Rivian Automotive Inc. and Lucid Group Inc. face headwinds. Lucid’s share price is down by more than a quarter this year, while Rivian recently cut its delivery forecast for the year due to risks associated with Trump’s trade war and was exploring refinancing some debt, Bloomberg reported.
“Starting a car company is really tough,” Rivian CEO RJ Scaringe told the news outlet. “It takes billions of dollars of capital, you need thousands of engineers, you have a really complex supply chain, you have to produce vehicles at very high levels of quality.”
He added that the next year will be “critical” for the company as it seeks to launch a more affordable, smaller SUV and start selling higher volumes.
Consulting firm AlixPartners recently slashed its forecast for EV sales in the United States. It expects the overall share of U.S. EV sales will fall to 7% next year, from about 8% now, before inching up again later in the decade. Battery-electric vehicles are expected to make up just 17% of the overall market by 2030, well below prior estimates.
That EV decline next year will be due to the federal tax credits going away, said Mark Wakefield, global auto market lead for AlixPartners. EV sales will eventually pick up again as new models reach the market and blue states like California likely increase their own tax incentives. But by 2030, the consultant projects gas-powered models will still make up half of all U.S. car sales, with hybrids taking up an additional 33%.
“I think it’s going to be pretty tough for anybody other than Lucid and Rivian,” Wakefield said of EV startups. Those two companies, he added, are fortunate to have “patient and supportive” capital — including large investments from the Middle East.
The Next Humvee?
For now, Bollinger aims to get back on track after its short stint in receivership this spring that ended with an $11 million settlement with the truck maker’s founder, Robert Bollinger.
Connelly said the company is telling customers it remains in business as it seeks to sell down an inventory of around 40 of its B4 trucks, which can be outfitted for uses ranging from beverage or package delivery, to landscaping or construction work.
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The former General Motors Co. executive acknowledged there is “somewhat of a lull in EVs right now.” But he’s optimistic, even if the federal tax credits end, that such states as California will retain their incentive programs. Many companies also aren’t giving up their internal sustainability goals, which could include electrifying their vehicle fleets. And Connelly said the company is also exploring selling in Canada, where demand is stronger.
“Customers on the commercial side are still excited about EVs,” he said.
Bollinger is now integrating more closely with Brea, Calif.-based Mullen, which initially took a controlling stake in 2022. Michery, Mullen’s CEO, also formally took over as head of Bollinger — though daily operations at the Oak Park headquarters will be handled by James Taylor, who had a previous stint leading the company.
Michery said his company doubled down on Bollinger partly because it believes in the B4. No B4s have rolled off the line of a Roush Enterprises facility in Livonia for months after Bollinger missed payments to the contractor, but the CEO said that those debts are now settled.
The plan now, he said, is to start building the truck in about two months at Mullen’s factory in Tunica, Miss., where it already puts together an electric cargo van and work truck.
But while the B4 remains the only Bollinger vehicle in production, Michery made it clear he’s more excited about eventually bringing two other prototypes to market: the B1 SUV and the B2 pickup truck. Both are large and boxy off-roaders that he said could be a Humvee successor for the military while also catering to the general public.
“Things will eventually turn,” Michery, 58, said of the EV market. Until then, Michery says his company will need to become a “lean, mean fighting machine.”
There have already been job cuts, including at Bollinger, which was down to a staff of about 85 last month after employing 145 as recently as last fall. And Michery said more change and consolidation and cutting is ahead, including shifting Mullen’s base of engineers in Southern California to Michigan, where they will work with engineers at Bollinger.
In 2023, Bollinger was awarded a $3 million grant from the state tied to the startup eventually creating 165 jobs. A Michigan Economic Development Corporation spokesperson, Otie McKinley, said about $950,000 has been distributed so far, and the company would need to “meet and maintain hiring milestones in order to be eligible for any further disbursements.”
‘Method to What We’re Doing’
Michery, who spent years in the entertainment industry before coming to EVs, had a full plate at Mullen well before the company took full responsibility of Bollinger.
Mullen has launched into several complex EV projects in recent years, from its commercial vans and trucks, to crossovers, to batteries. In the most recent quarter, it reported a net loss of nearly $54 million on roughly $5 million in sales. Last fiscal year, it reported losing more than $500 million, and in one filing, executives flagged concerns about the company’s ability to make it through this year.
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Meanwhile, Mullen has carried out multiple reverse stock splits in recent months to stay in Nasdaq compliance. The company’s share price as of June 27 had once again slumped well below the minimum $1 mark, to 60 cents, after dropping 96% in the last month.
The EV firm in recent years has navigated lawsuits from shareholders and been the focus of an investigation by famed short-seller Hindenburg Research. In one recent federal case with a creditor in New York, Mullen was forced to cough up its massive manufacturing plant in Mishawaka, Ind., as part of the settlement deal.
Michery seems to brush it all off. In an interview last week, he said his company still has a steady stream of funding, including a $150 million equity line of credit from an outfit called Esousa Holdings. He acknowledged Mullen is something of a “meme stock” that has been affected by short sellers, but pledges it will bounce back soon enough. As for sales of electric vehicles picking up, Michery views it as a waiting game — one where his company can outlast many of the other players in the space.
Mullen to begin immediately accepting cryptocurrency, including Bitcoin and meme coin, for the purchase of Mullen and Bollinger commercial EVs.
Learn more: … — Mullen Automotive (@Mullen_USA)
Last week, Mullen made its latest announcement: It will start accepting Bitcoin and $Trump meme coin to buy its vehicles. Michery, in an email, explained it as an effort to “help buyers get into our products.”
“You’ve got to kill me to beat me,” said the CEO, who last year made about $3.25 million, including stock awards, running the company, according to company filings, and the year prior brought in more than $49 million in compensation, including company shares after reaching several milestones. He promised that there is “a method to what we’re doing.”
Back at Bollinger’s Oak Park headquarters, Connelly sounded a hopeful tone that the startup is “here to stay” after emerging from receivership. A new administration will take over eventually. Maybe the tax credits now on the chopping block will return.
“Those that can weather it,” he said of this tough moment for EVs, “will be stronger for it.”
