When Mullen Technologies announced plans nearly two years ago to manufacture electric sports cars on the West Plains, it brought promise of more than 800 new jobs in Spokane County and the potential for more.
Now that future appears to be in doubt as the California-based company has indicated it chose Memphis, Tennessee, as a new home for an electric vehicle manufacturing plant.
Last week, the Economic Development Growth Engine for Memphis & Shelby County approved a $40.5 million tax break for Mullen as the company pledged to lease an 820,000-square-foot facility to manufacture electric SUVs, beginning in 2024.
Mullen executives said in the meeting with EDGE it changed its production focus from the Dragonfly K50 sports car to an electric SUV because it’s easier to launch as new business in the electric-vehicle segment with vehicles priced between $58,000 to $70,000.
“Mullen has been evaluating other locations for its assembly plant in their home state of California as well as pursuing a new construction project in Spokane,” according to EDGE’s term sheet with Mullen Technologies. “The Memphis area, however, provides distinct advantages over other opportunities. The Memphis option does not require a time-consuming new building design, financing and construction process.”
Mullen also has purchased a facility 50 miles from Memphis in Tunica, Mississippi, that will provide “advanced engineering and manufacturing capabilities,” according to the company.
“Memphis’ location makes it a primary logistical hub for distribution throughout the U.S. and will provide Mullen with key strategic advantages,” John Taylor, vice president of manufacturing for Mullen, said in a statement. “The local and state-level administrations are both fully supportive of our manufacturing plan and are showcasing their commitment with significant financial incentives that will help us grow along with the city and state over the next decade.”
Mullen is remaining silent on its plans in Spokane and has not responded to multiple requests for comment on project updates.
Memphis city officials declined to comment on whether Mullen committed to the area over other locations for the proposed electric vehicle facility there.
In 2019, Mullen signed a letter of intent with S3R3 Solutions calling for the agency to build and lease 1.3 million square feet of assembly, research and development space to produce the Dragonfly K50 electric sports car on the West Plains. The facility would be financed through a revenue bond to be paid back through the lease agreement with Mullen.
In the nonbinding agreement, Mullen agreed to raise an equity investment of $50 million before signing a lease with S3R3 Solutions, formerly the West Plains Airport Area Public Development Authority.
Mullen was to start assembly of electric vehicles with a goal of bringing the car to market by the second half of 2020. The company, through Mullen Energy, also was interested in bringing research and development of lithium batteries to the area, potentially increasing total jobs to 3,000.
Months went by as Mullen’s agreement with S3R3 Solutions was extended and the company said it was raising funding for the project, including applying for a $450 million Advanced Technology Vehicles Manufacturing loan from the U.S Department of Energy.
In July, Mullen said it would meet requirements of the letter of intent with S3R3 Solutions by late 2020 and anticipated starting assembly and development of the Dragonfly K50’s battery packs in a 500,000-square-foot facility with potential to expand by an additional 800,000 square feet.
Mullen also announced plans to merge with Miami-based Net Element, a publicly-traded electronic payment company. The reverse merger, a process in which a privately held company takes control of a publicly traded company, allows Mullen to acquire Net Element and bypass what could be a somewhat lengthy process to go public on its own and generate capital needed to pay its deposit with S3R3 Solutions.
S3R3 Solutions Executive Director Todd Coleman told The Spokesman-Review in July the agency’s letter of intent requirements remained unchanged and the merger was critical for financing needed to move the project forward.
However, Mullen racked up more than $653,317 in late fees payable to Net Element because of its delay in filing a registration statement with the U.S. Securities and Exchange Commission, according to a letter to Net Element shareholders.
Coleman said Spokane remains an option for Mullen Technologies’ electric vehicle manufacturing plant, but there are challenges related to incentives the company could receive when compared with other states.
Coleman added S3R3 Solutions also has to consider what incentives other cities are offering Mullen and weigh that with the decision on whether it’s in the best interest of the community for the agency to subsidize the electric vehicle manufacturing facility.
“We want to protect the community and we need to see they have the financing available. … We applaud them and their efforts to continue to push this project forward,” Coleman said. “Electrification of vehicles is not an easy industry to move into and they’ve been very tenacious to push forward to find ways to finance the project, and we’ll continue to work with them as we can.”
Spokane County Commissioner Al French, who also is S3R3 Solutions Board chairman said he had not spoken with Mullen Technologies since it announced plans to open the manufacturing facility in Memphis but believes Spokane is a desirable area for the company.
“The deal is never done until the ink is dry, so we continue to work to make an attractive business relationship with them over here,” French said.
French said S3R3 Solutions’ recent deal to bring Amazon Air to the Spokane International Airport illustrates its success with recruiting companies to the area.
Construction is anticipated to be complete this year for a rail and truck transload facility on the West Plains where shipments are transferred from trucks to rail and vice versa. The transload facility would be suitable for not only Mullen, but a variety of aerospace and advanced manufacturing industries to transport freight, French said.
“We would love to be able to make the deal with Mullen, but if we don’t, there will be somebody else,” French said. “We structured ourselves so we don’t have any financial exposure. If they walk away, we aren’t financially hurt by that. We’ll just readjust our sights and go after the next company.”