Tesla Inc has agreed to purchase energy storage company Maxwell Technologies Inc for $218 million in an all-stock deal that could assist the automaker produce batteries that hold more energy and last longer at a time when it has to cut expenses and faces increasing competition.
Tesla is quickly boosting production of its Model 3 sedan and needs to reduce the price to reach a broader client base than its pure luxury vehicles.
Maxwell executives informed investors in January that it had developed and patented a “dry electrode” technology that could significantly boost the driving range and decrease the cost of electric vehicle batteries. In a presentation, Maxwell stated it anticipated strategic alliances “within six months” centered around this technology.
The company also makes ultracapacitors, that discharge energy quicker than batteries and are observed as complementing battery technology.
Ultracapacitors, together with the energy of batteries, can allow rapid response times, function throughout a broader temperature range and extend battery life by up to two times, according to a blog post on Maxwell’s website.
Volvo-owner Geely Holding Group on May 2018 discussed a deal with Maxwell and described the company’s ultracapacitor technology as helpful for delivering “peak power” for hybrid cars.
“Tesla needs Maxwell’s solvent-free battery electrode manufacturing for a viable path to decrease battery costs,” stated Craig Irwin of Roth Capital Partners. “Real competitors are coming now, so Tesla needs to move fast.”
General Motors and Lamborghini are also the customers of Maxwell.