Reasons Tesla’s Buying Maxwell Technologies, According to Analyst

Maxwell Technologies’ building in San Diego CA

Maxwell Technologies’ building in San Diego CA

While there is a single problem with super- and ultra-capacitors - the sheer volume and the fact that a module of ultracaps will hold much less energy than a module of batteries of the same size - the best guess is that Tesla won't be replacing all their batteries with caps in the short-term. It's little surprise, then, that Tesla had its eye on Maxwell - after all, the company has lots of experience with traditional lithium-ion batteries.

Tesla Inc has agreed to buy energy storage company Maxwell Technologies Inc for $218 million in an all-stock deal that could help the electric vehicle maker produce batteries that hold more energy and last longer at a time when it needs to cut costs and faces growing competition.

"We are always looking for potential acquisitions that make sense for the business and support Tesla's mission to accelerate the world's transition to sustainable energy", said Tesla in a statement sent to CNBC.

The company also makes ultracapacitors, which discharge energy faster than batteries and are seen as complementing battery technology.

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Combined with the energy of batteries, ultracapacitors can enable rapid response times, extend operational temperature range and lengthen battery life by up to two times, according to a Maxwell Technologies. If Tesla can be the first to bring the next generation of battery technology to market, that could allow it to bring higher energy density batteries to customers at a lower cost and at lower weights, all while increasing the speed of charging.

Tesla's offer values individual Maxwell shares at $4.75, meaning the firm is buying the battery company at a 55 per cent premium to last week's closing price of $3.07.

In 2011, Elon Musk predicted that supercapacitors, not batteries, will power future electric vehicles (EVs) such as those being produced in massive numbers by his Tesla, Inc. Currently, Tesla's exclusively buys auto batteries from Panasonic. Was going to do my PhD at Stanford on them. Supercaps are also used to store massive amounts of electricity in national power grids.

Maxwell expects the deal, which has already been approved by its board, to close in the second quarter of 2019, or shortly thereafter.

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