Tesla Inc. announced one of its rare acquisitions Monday, of ultracapacitor company, Maxwell Technologies Inc., in order to bolster the Silicon Valley automaker’s battery technology as it ramps up production of the Tesla Model 3 sedan.
That should save Telsa’s cash for its other obligations in the near term, just as the company posted lack luster earnings that failed to meet expectations.
Of the deal, Chicago-based Almington Capital quipped:
— John Engle, Almington Capital Merchant Bankers (@AlmingtonCap) February 4, 2019
The deal values Maxwell shares at $4.75 per share, which is a 55 percent premium over the stock’s closing price Friday according to the companies.
Maxwell shares rocketed Monday on news of the merger:
Shares of battery maker Maxwell rocket 50% on news of Tesla takeover https://t.co/kIwwaXStDy
— MarketWatch (@MarketWatch) February 4, 2019
A Tesla spokesperson said on Monday:
“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.”
Maxwell’s current clients include General Motors and Lamborghini, so their capacitors are already road proven in other factories’ automobiles to extend their battery life while improving their performance. Their capacitors are also used for power grid applications including alternative energy sources and storage.
The ultracapacitor company says the deal is approved by its board of directors, and expects the acquisition to close out by the end of June this year or shortly thereafter.
Reuters reports that outside legal council representing the two companies for the acquisition include DLA Piper LLC for Maxwell (with Barclays Capital Inc serving as independent adviser), and Wilson Sonsini Goodrich & Rosati for Tesla.
A Better Electric Battery
Ultracapacitors are electrical energy storage devices that have the ability to store a large amount of electrical charge. Unlike the resistor, which dissipates energy in the form of heat, the ideal capacitor does not lose its energy. -Electronics Tutorials
In 2013 Elon Musk tweeted:
@yes_andre I'm a big fan of ultracapacitors. Was going to do my PhD at Stanford on them. But we need a breakthrough in energy density…
— Elon Musk (@elonmusk) May 20, 2013
Among the many applications of ultracapacitors are two important ones for Tesla:
1) Better electricity storage and better durability for longer product life for Tesla’s home batter, the Power Wall, which provides backup power for homes.
2) Use in regenerative breaking systems. Tesla’s electric vehicles employ regenerative breaking (a technology developed for mass scale production automobiles by Toyota for its hybrid Prius and all electric vehicles).
Traditional brakes on automobiles use friction to slow and stop the car’s wheels from turning, and this friction takes all of the kinetic energy from the car’s inertia and converts it into heat, which is then dissipated into the air and lost.
The regenerative brakes on Tesla’s cars work differently, running the vehicle’s electric motors in reverse in a clever way that converts the car’s inertia into electricity that recharges the batteries, saving energy while extending the car’s range.
3) Providing cranking power and voltage stabilization in the Tesla vehicle’s start/stop systems to give all that electric torque a smoother power arc during acceleration.
The ability of these ultracapacitors to store so much energy creates more energy sources for the vehicle’s use, enabling faster responses.
The voltage stabilizing features can increase operational temperature ranges while lengthening the battery life of Tesla’s cars by as much as 100 percent.