Tesla Maxwell acquisition

Tesla homes on ultracapacitor developer Maxwell

Tesla to grow its energy storage capability bringing state of the art ultracapacitor manufacturing in-house.
Published: Fri 08 Feb 2019

Tesla is rapidly building a name for itself in the energy market – and a household name to boot – for its electric vehicles and in some markets its home and utility-scale energy storage systems. Following Tesla’s acquisition of SolarCity, the company launched a solar roof tiling product. Now Tesla is further deepening its position in the energy market, and the storage market in particular, with its plan to acquire the ultracapacitor manufacturer Maxwell Technologies.

According to a statement from Maxwell, the company will be merged with a Tesla subsidiary, probably in the second quarter of this year or shortly thereafter. The deal is valued at $218m.

"We are very excited with [the] announcement … We believe this transaction is in the best interests of Maxwell stockholders and offers investors the opportunity to participate in Tesla's mission of accelerating the advent of sustainable transport and energy,” commented Dr Franz Fink, President and Chief Executive Officer of Maxwell.

For its part Tesla has so far not issued a comment on the acquisition, and nor was there indication that it might have been forthcoming in the 2018 update for investors that took place on 30 January, just days before the announcement.

Ultracapacitors in energy

Maxwell has been a pioneer in the development of ultracapacitors, which offer high power density with rapid discharging and charging and a large cycle lifetime. The company claims more than 65m cells deployed in mobile and stationary applications worldwide.

In the power sector typical applications for ultracapacitors, either as a stand-alone or integrated to other storage in utility grids and microgrids, demanding fast response include frequency response, voltage stabilisation, solar and wind power smoothing and generation ramping.

They also are widely used in the automotive market for applications such as stop-start, regenerative braking and power assist. Other industries where applications are found include heavy transportation, industrial equipment and consumer and industrial electronics.

In addition to ultracapacitors, Maxwell has developed a dry electrode technology, which although yet to be commercially implemented, offers the potential to improve the capacity and lower the production costs of standard lithium-ion batteries. As a dry technology it is also more environmentally friendly.

The Tesla benefit

So how can Tesla benefit from the acquisition? CEO Elon Musk has long had an interest in ultracapacitors – also known as supercapacitors – and intended to research them in a PhD before dropping out to join the then (mid-1990s) internet boom.

Tesla’s 2018 investment summary reports that the energy business reached a “significant milestone” with deployment of 1.04GWh of energy storage, nearly tripling the 358MWh deployed in 2017. With improvements in production, the aim is to more than double energy storage deployments to over 2GWh in 2019. Growth areas envisaged are North America, Europe and Australia, with the latter including a virtual power plant programme with a planned 50,000 interconnected Powerwall batteries.

The statement, which reports the use of Powerpack units in over 100 microgrid projects across 32 countries, notes also that the Hornsdale battery in South Australia is still the world’s largest but that “multiple requests” have been received to build significantly larger battery projects.

Clearly there will be opportunities for the delivery of ultracapacitors in the energy side of the business with integrated energy storage options and new grid and microgrid services. On the automotive side the availability of ultracapacitors brings more of the equipment supply line in house which could prove important as planned production continues to ramp.

Further research on ultracapacitors is expected to lead to improvements in their performance and cost, although whether Musk has other technological innovations up his sleeve remains to be seen. A topical issue currently being experienced with the cold weather that needs addressing, whether with ultracapacitors or other technologies, is the reduction in the range of EVs, typically around 20-30%.

The Maxwell acquisition is Tesla’s fifth and besides SolarCity, the others are on the manufacturing side of the business. These are Riviera Tool in 2015, Grohmann Engineering in 2016 – whose expertise is behind the improved battery production at the Gigafactory 1 in Nevada – and automated equipment manufacturer Perbix in 2017.

Notably Maxwell also has a corporate office in Shanghai – in addition to others in South Korea and Germany – which is also the location of Tesla’s Gigafactory 3 currently under construction.