Tesla to buy battery-tech firm Maxwell for US$218M in stock

Tesla to buy battery-tech firm Maxwell for US$218M in stock

Tesla's acquisition appears to be an attempt by the company to improve its energy technology.

Musk announced that Tesla will acquire Maxwell Technologies, a firm based in San Diego, California that makes supercapacitors (or ultracapacitors), which store and deliver energy much the same way a battery does but provides more power and shorter charging times.

It also makes ultracapacitors, which discharge energy faster than regular electric vehicle batteries.

"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", a Tesla spokesman told Barron's on Monday morning.

Tesla does not invest lightly, as can be seen with its acquisition of Grohmann Automation, which gave it a competitive advantage and a way to maximize automation in the Tesla Model 3 production lines to get the auto to scale faster.

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Ultracapacitors, combined with the energy of batteries, can enable rapid response times, function across a broader temperature range and lengthen battery life by up to two times, according to a blog post on Maxwell's website. In a presentation, Maxwell said it expected strategic alliances "within six months" centered around this technology. "Real competitors are coming now, so Tesla needs to move fast". Last week Maxwell's stock traded at just over $3.00 per share for a valuation of $140 million, Tesla has paid $4.75 per share making the transaction worth over $200 million.

Maxwell's customers also include General Motors and Lamborghini. Maxwell surged as much as 52 percent - a record jump - to the highest since August 1.

The acquisition, Tesla's first in more than a year, is being described by analysts as a "perfect fit" for Elon Musk's ambitious electric vehicle and battery maker, as well as a low-risk bet on lowering battery costs and boosting battery performance.

Currently, Japan's Panasonic Corp is the exclusive battery cell supplier for Tesla cars. 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. During its fourth quarter, the company turned a small profit and expects to do so in each quarter this year.

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