GEM Group could decide to take over the commercial EV manufacturer’s Mishawaka plant as part of its damages.
After a four-year-long legal dispute, Mullen Automotive has settled its case with Gem Group over a November 2020 contract breach.
The trouble first started in September 2021 when GEM Group, a global investment firm, alleged that Mullen had breached a securities agreement from the previous year. In November 2023, an arbitrator sided with GEM, eventually ordering Mullen to pay nearly $27 million in damages and a further $3.8 million in attorney fees and other costs, with any unpaid amount gaining 9% interest every year.
Mullen did try to fight the decision: After the company was ordered to put $7 million into an escrow account that would eventually be paid out to GEM, Mullen’s attorneys filed a complaint against GEM Group. Mullen’s side claimed that the other company had “engaged in an unlawful securities transaction” by making an agreement with Mullen while still an unregistered dealer and sought to declare that agreement void. Ultimately, a judge stayed the action in April 2024.
See also: Mullen preps more layoffs, lease terminations
Despite repeated attempts by Mullen ,to vacate the award, a judge definitively affirmed it and vacated Mullen’s dismissal attempts in February 2025, ruling that Mullen had to satisfy the amount by May 7, 2025.
On May 9, the two officially reached a settlement agreement that gave GEM Group a 55-day due diligence period to determine whether it would accept ownership of Mullen’s Mishawaka, Indiana, plant as a way to satisfy the judgment. During this period, which GEM can extend at its discretion, collection of the award is suspended.
Mullen CEO Davd Michery said the agreement represented a path to “full resolution” with GEM that would allow the company to “put the matter behind [them].”
Losing ownership of the Mishawaka plant does not necessarily spell doom for Mullen; the company has a second factory in Tunica, Mississippi, where it has manufactured its lineup of commercial electric vehicles since 2023. However, at 120,000 sq. ft., it’s a fifth of the Indiana location’s 650,000 sq. ft..
Recently, the company has been focused on building out its domestic battery manufacturing arm as well as saving money with asset purchases and layoffs, respectively. In Q1, Mullen reported a net loss of $119 million on nearly $3 million in sales.
