When Mullen Technologies announced plans to assemble the Qiantu K50 electric sports car on the West Plains, it brought promise of more than 860 jobs within seven years.
Those plans – paired with the company’s ambitions to manufacture a midpremium SUV and lightweight, lithium-ion batteries – could bring what some see as a widespread economic impact to the area on par or greater than Amazon’s $181 million fulfillment center now under construction.
The California-based company signed a letter of intent with the West Plains Public Development Authority last month that calls for the agency to build and lease 1.3 million square feet of assembly and manufacturing space for the Qiantu K50 as well as research and development facilities for lithium-ion batteries.
“The (Qiantu) K50 is front and center right now, but the true potential is the development of lithium battery technology,” said Todd Coleman, executive director of the West Plains PDA. “Spokane could become a leader in developing that technology. It could easily create 3,000 jobs or even more.”
The proposed facility on the West Plains could eventually expand to create an “energy business park” with potential for 10,000 jobs, some of which are engineering positions that pay upward of $100,000 a year, Coleman said.
Phase one of the development would call for a 500,000-square-foot facility for automobile manufacturing and research for the lithium-ion battery, which would be built by 2021. The second phase would include an 800,000-square-foot building for commercialization of the batteries. It would be completed two to three years later.
The West Plains PDA will build the manufacturing and assembly facility, provide rail access and lease the site to Mullen Technologies, which would be financed through a revenue bond that would be paid back through the lease agreement.
The PDA is working with Mullen Technologies to secure a temporary facility of more than 100,000 square feet for battery research, production, development and initial assembly of the sports car. The company anticipates moving into the temporary facility later this year.
Mullen Technologies was drawn to the West Plains because of its affordability and proximity to rail, CEO David Michery said:
“There’s a lot of really good companies that come out of Washington and, specifically, Spokane. We consider it to be a good midpoint for us to get product to the Midwest and South. Strategically, it would work for us, and the municipality was willing to bring us there and support us.”
The Qiantu K50 is expected to launch in the U.S. in 2020 under a partnership with China-based Qiantu Motor, which would ship vehicle parts to the United States. Mullen Technologies would then assemble the cars in Spokane.
The Qiantu K50 was unveiled in April at the International Auto Show in New York.
The high-performance sports car, powered by a lithium-ion battery, is capable of reaching 60 mph in under 4.2 seconds and has a range of 250 miles. It features an aluminum frame and aerodynamic carbon fiber design, with high-quality leather sports seats, an LED lighting system, in-car solar energy air circulation system, 19-inch aluminum alloy wheels, six color options, a suite of safety technologies and three driving modes: adaptive, sport and boost.
The starting price for the electric vehicle will be about $125,000, according to the Mullen Technologies website.
What is Mullen Technologies?
Privately held Mullen Technologies owns several businesses, including Mullen Auto Sales, a series of dealerships in California, and CarHub, a digital platform for buying and selling cars.
The company is planning an initial public offering in this year’s third quarter. Its anticipated valuation is $500 million, according to preliminary filings with the Securities and Exchange Commission.
Michery purchased Mullen Motors in 2012 from Arthur Allen. Prior to purchasing the business, he had a successful music career of close to three decades as owner and executive of several music labels, including American Music Corp.
Michery, who describes himself as a car aficionado, says his vision for Mullen Technologies is fueled by a passion for cars and the environment, adding he wants to find innovative, holistic solutions to the clean-air problem.
He acquired Coda Automotive, an electric car startup that filed for bankruptcy in 2013, and obtained the intellectual property for the first all-electric five-person sedan. He changed the company’s name from Mullen Motors to Mullen Technologies in 2014 and attempted to reintroduce the electric sedan to the market.
Although the sedans contained reliable batteries and technology, they didn’t have much visual appeal, Michery said, adding he retired them to pursue development of the Qiantu K50.
Mullen Technologies aims to enter the mass market for electric vehicles through its brand, Ottava, which will market a midpremium, all-electric SUV similar to Tesla’s Model X in the $55,000 to $60,000 range, Michery said. The company expects to produce 3,000 of the SUVs in 2022 and gradually ramp up production to 32,000 vehicles by 2027, according to an investor presentation earlier this month posted on YouTube.
The company also indicated plans to develop a high-end dealership, Mullen Premium Auto Sales, specifically to sell the Qiantu K50 and midpremium SUV.
Mullen Technologies is finalizing negotiations with a “top European automaker” to license the SUV platform and is also in the midst of a joint development agreement with a “top Fortune 50 patent-rich research and development organization” for lithium-ion battery technology, that, at 600 pounds, weighs half the size of Tesla’s batteries, Frank McMahon, chief technology officer for Mullen Technology, said during the investor presentation.
The battery is in the research and development phase, but the company is expecting to take it to market in three years, he said.
When asked last week, Michery declined to name the two companies with which Mullen is in negotiations, citing nondisclosure agreements.
Bringing Mullen Technologies to the West Plains
Terry Dunne, of Spokane-based Terrence Dunne and Associates, helped connect Mullen Technologies and the West Plains PDA through his friend, Michael Magat, an investment banker for MZM Capital Management, who is working with the electric vehicle company.
Dunne said Magat called him last fall, describing Mullen Technologies as an emerging electric vehicle company similar to Tesla that was looking to raise funds to manufacture the Qiantu K50 and eventually go public.
“Mullen was looking to build a manufacturing facility east of Los Angeles. I said to Michael, ‘Would you think about building a facility in the Spokane area?’ ” Dunne said.
He then connected Mullen Technologies with Greater Spokane Incorporated and the West Plains PDA, which pitched a potential manufacturing facility on the West Plains to the electric vehicle company.
Transportation infrastructure, such as the proposed $2 million short-line rail connecting to the Geiger Spur and airport property as well as a transload facility where shipments are transferred from trucks to rail – or vice versa – was a selling point, Dunne said.
Another selling point was the potential for Mullen Technologies to purchase the Spokane County Raceway to hold events and test electric vehicles, Dunne said.
“That road course out there would be ideal because it’s only 3 miles from the facility,” he said. “When you combine everything with the affordability, favorability of taxes, the low cost of doing business, availability of the racetrack and skilled labor, that’s kind of where everything was sold to them.”
Mullen Technologies agreed to raise an equity investment fund of $50 million before entering a lease agreement with the West Plains PDA in September, according to the letter of intent.
Because the proposed assembly facility sits in an opportunity zone – which is designed to spur economic development through tax benefits to investors – it could provide an additional funding option for the company, Coleman said.
Coleman said he’s confident Mullen Technologies has the capacity to raise $50 million by September, and that’s why the West Plains PDA entered into an agreement with the company.
“We had an opportunity to see the product. It got good reviews at the International Auto Show in New York and Mullen shared they had significant interest in the automobile,” he said. “I believe there is a strong potential they will be able to raise that equity.”
Dunne said Mullen Technologies could also be eligible for government loans and funding from the company’s IPO, among other options.
“When you put all those financing alternatives together, it’s a substantial financial package,” he said. “You are looking at the economic impact in Spokane of somewhere between $300-$400 million. It could be the largest project ever done in the Spokane area. Amazon’s project is $181 million. I think this would surpass that. It’s a major project.”
Dunne said Mullen Technologies illustrates its credibility through proposed joint agreements with other companies and its plans to market products in addition to the Qiantu K50.
He added that Mullen Technologies seems to be making progress on raising the necessary funds.
“But, they still have to get it done,” he said. “We are doing everything we can to make sure this becomes a reality for Spokane. It would be a great win for the area.”