Tesla’s Acquisition of Maxwell Technologies — More Thoughts & Information

Tesla today announced the completion of its acquisition of the battery and supercapacitor company Maxwell Technologies. This has been on the cards since early February and is in line with the recent timeline given in Tesla’s Q1 investor call. Maxwell’s battery dry electrode manufacturing process has already been piloted by Tesla, and will allow significant battery cost reductions and energy density improvements.

Tesla has made the acquisition via a stock-swap, which approximates to a value of $230 million, for a controlling stake of 79% of Maxwell.

Tesla’s current cell costs of around $100/kWh amount to approximately $3.5 billion in battery production costs per year (around 70 kWh per vehicle and 500,000 vehicles). Maxwell’s dry battery electrode manufacturing technology claims to allow a 10–20% cost reduction versus traditional wet-electrode manufacturing techniques.

It’s not clear at this stage what overall reduction this 10–20% gives to the entire cell manufacturing process. Given Tesla’s $3.5 billion annual cell costs, even an overall cost reduction on the order of 5% would mean that the acquisition pays for itself over just a couple of years, and thereafter will be all upside.

Time savings and environmental benefits are also significant potential gains, as well as a plethora of other performance benefits that Maxwell has hinted at and Tesla is no doubt interested in. These include energy density of 300 Wh/kg with a path to 500 Wh/kg. Tesla is currently running somewhere around 250+ Wh/kg.

It’s not clear whether Tesla will find a use for Maxwell’s supercapacitor technology. We’ve previously speculated that there may or may not be use cases that leverage this. Alternatively, Tesla might leave the existing supercapacitor business undisturbed, or ultimately sell that side of the business.

We’re keen to learn more about the Maxwell Technologies acquisition, and what it means for Tesla. We will bring you more updates when we have them.