Tesla to buy battery firm Maxwell Technologies for $218m

Tesla to buy battery firm Maxwell Technologies for $218m

In a $218 million deal with San Diego-based Maxwell Technologies announced Monday, Tesla plans to buy the energy storage makers who build products for the grid, cars, trucks, transportation systems (like railroads), and more.

The announcement comes amid a cost-cutting initiative at the automaker - which announced just last month it would slash an additional 7 percent of its workforce as it works to lower the price of its flagship Model 3 sedan to reach a broader market.

Maxwell executives told investors in January that it had developed and patented a "dry electrode" technology that could significantly increase the driving range and reduce the cost of electric vehicle batteries.

Tesla's acquisition of Maxwell is expected to close in the second quarter.

Creating more efficient energy storage and transfer technology is seen as key to the uptake of electric cars and electric vehicle charging points around the world.

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Tesla has moved to acquire Maxwell Technologies, a company that specializes in supercapacitor technology. That's considered fast charging, a hallmark of the Tesla brand.

The deal values each share of Maxwell Technologies stock at $4.75, or almost 50% higher than the ~$3/share price it was hovering at in the weeks before the announcement. Maxwell shares rose to trade at $4.58. Existing customers of the firm include General Motors and Lamborghini, while Tesla's exclusive battery cell supplier is Panasonic.

'I'm a big fan of ultracapacitors. But we need a breakthrough in energy density.,' Musk had tweeted.

Aside from producing electric cars, Tesla also sells power storage as part of its solar power business. The deal is detailed in a letter from Maxwell and an 8-K Filing with the SEC filed by the company on February 4th, 2019.

Wilson Sonsini Goodrich & Rosati represented Tesla as outside legal counsel.

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