One of the biggest game-changing news stories in the electric vehicle (EV) and energy storage space is the impending acquisition by Tesla of Maxwell Technologies – for a reported US$218 million with the all-stock-deal expected to be finalised in Q2 2019. Analysts at Frost & Sullivan examine the impact on Tesla and the wider industry.

 

A pioneer in the design and manufacture of high-power density ultra-capacitors, Maxwell Technologies has virtually unlimited opportunity, playing in the transportation, industrial and consumer markets. Core megatrends that drive Maxwell’s values – integration of renewable energy into the grid, electrification of ICE, and accelerating EV growth – fit like a glove into Tesla’s energy strategy, say analysts at Frost & Sullivan.

 

Super-charging Tesla cars to 375mph range

 

Tesla Model 3 currently has an energy density (at cell level) of 210 Wh/kg and 275 Wh/litre at the battery pack level. Maxwell claims that its patented dry cell electrode can produce energy density of over 300 Wh/kg – a 42.8-per-cent increase over Tesla’s current batteries, whereas the firm claims a planned energy density of over 500 Wh/kg (a 138-per-cent increase over Tesla’s current batteries). 

 

Such a boost in the energy density would represent a breakthrough in the EV industry and would propel Tesla cars from the current range of 220 miles to around 375 miles. The end result of applying Maxwell’s dry cell technology would be a simplified manufacturing process, which, in turn, could lead to 10–20-per-cent cost reduction, alongside improved battery life (up to two times better).

 

Purchasing power: Major benefits of the acquisition

 

The upcoming acquisition would offer the following major benefits to Tesla, according to Frost & Sullivan. 

 

Firstly, the new deal would offer the opportunity for pairing Tesla’s Powerpack with Maxwell’s ultra-capacitor storage systems for utility-scale applications such as primary frequency response and grid stabilisation.

 

Secondly, it would open up the prospect for myriad automotive applications – start-stop, regenerative braking, and actuated power.

 

And finally, Maxwell’s dry electrode manufacturing process, which is an environmentally-friendly process without solvents, will improve battery performance including energy density and range while cutting down manufacturing costs.

 

Diversifying Tesla’s battery suppliers

 

So what impact will this acquisition have on Tesla’s partnership with Panasonic? 

 

There are clear signs that Tesla is looking to diversify in terms of its battery suppliers to reduce its dependency on Panasonic. In addition to acquiring Maxwell, the company is already in talks with several Chinese battery manufacturers for local battery sourcing to cater to vehicles manufactured at its Gigafactory 3 – currently under construction in Shanghai, and with an initial production target of 250,000 EVs per annum.

 

Meanwhile, Panasonic inked a deal with Toyota for the manufacturing of rectangular-shaped prismatic batteries, which it aims to sell it to other OEMs such as Honda. 

 

It’s certainly a temporary blow at the moment for Panasonic, says Frost & Sullivan. However, the exclusive partnership for the Gigafactory at Tesla’s Nevada plant is expected to keep Panasonic in play.

 

Fast-track to dry electrode manufacturing commercialisation

 

Frost & Sullivan believes that the acquisition of Maxwell is expected to be a clear winning strategy for Tesla, which it says has bought a company whose goals clearly align with its vision. In addition, Tesla acquires an experienced technical and manufacturing team in Maxwell – one that is noticeably capable of making important advancements in the EV and storage industry. 

 

Given the fact that CEO Elon Musk already has a background on ultra-capacitors, Tesla is expected to commercialise the dry electrode manufacturing technology sooner than expected with potential synergies for the company that will further cement its position in the lucrative EV business.