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Net Element Inc. (NASDAQ: NETE), Mullen Stand to Benefit from Decreasing EV Manufacturing Costs
October 23, 2020

Net Element Inc. (NASDAQ: NETE), Mullen Stand to Benefit from Decreasing EV Manufacturing Costs

  • Investment bank UBS reports that electric cars will cost the same to make as conventional cars by 2024.
  • Expensive batteries, which account for between a quarter and two-fifths of EV’s cost, have been barrier to production.
  • NETE recently announced entry into EV space through merger with privately held Mullen Technologies Inc.

New research from investment bank UBS indicates that electric vehicles (“EVs”) may be as cheap to manufacture as regular models within the next four years (https://ibn.fm/UV8WX). This news bodes well for Net Element Inc. (NASDAQ: NETE), a global financial technology and value-added solutions group that recently announced its planned entry into the EV space through an upcoming merger with privately held Mullen Technologies Inc. (https://ibn.fm/xBu5G).

According to the research, “electric cars will cost the same to make as conventional cars, with internal combustion engines, by 2024 and an acceleration in the shift away from fossil fuel vehicles may be imminent.” In addition, “the extra cost of manufacturing battery electric cars versus their fossil fuel equivalents will diminish to just $1,900 (£1,470) per car by 2022, and disappear completely by 2024, according to research by the investment bank UBS.”

This is big news to many car manufacturers, which have been “reluctant to shift production away from their profitable internal combustion engine models towards electric cars because of expensive batteries, which are almost exclusively made by east Asian companies. . . .  Batteries account for between a quarter and two-fifths of the cost of the entire vehicle.” UBS said it anticipates battery costs to drop below $100 per kilowatt hour (“kWh”), a key milestone, by 2022.

Mullen recently announced its own plans to start work on a manufacturing facility as well as accept pre-orders for its M05 fully electric SUV (https://ibn.fm/TKhPz). “We are excited to begin the build-out of our pilot facility and pre-sales of our MX-05 SUV in October,” said Mullen Technologies chairman and CEO David Michery. “We plan on completing the build-out by April 2021 and to begin assembly of certification prototypes by July 2021. These vehicles will be used for homologation, which is expected to take 16 months and be completed by May of 2022, at which time we expect to begin delivering the first vehicles to the public.”

The planned manufacturing facility, which was originally Mullen’s high-voltage battery R&D center, will be renovated to include general assembly as well as battery assembly capabilities; the structure will also house R&D and serve as a warehouse. When complete, the facility will be capable of producing up to 1,000 MX-05 EVs per year. In addition, the plant will manufacture other Mullen models, including the already announced MX-07 and MX-03.

Net Element operates a payments-as-a-service transactional and value-added services platform for small to medium enterprise (“SME”) in the United States and selected emerging markets. In the U.S., the company aims to grow transactional revenue by innovating SME productivity services using blockchain technology solutions and Aptito, its cloud-based, restaurant and retail point-of-sale solution.

Internationally, Net Element’s strategy is to leverage its omni-channel platform to deliver flexible offerings to emerging markets with diverse banking, regulatory and demographic conditions. Net Element was ranked as one of the fastest-growing companies in North America on Deloitte’s 2017 Technology Fast 500(TM). In 2017 Net Element was recognized by “South Florida Business Journal” as one of 2016’s fastest-growing technology companies.

For more information on Net Element, 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://ibn.fm/NETE

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