Tesla to buy battery-tech firm

Tesla has agreed to acquire energy tech company Maxwell Technologies for about US$218 million in stock in a bid to improve electric vehicle charging and reduce EV production costs.

Maxwell makes ultracapacitors which store and quickly deliver energy, and the deal is expected to provide expertise in capacitors for faster EV charging. The energy solutions company says it will become a wholly owned subsidiary of Tesla.

It also has an electric battery component process more efficient than those typically used in the industry, which could significantly reduce the cost of producing EVs.

The purchase price of US$4.75 a share for about 45.9 million shares, announced by Maxwell, amounts to about a 55% premium to the target’s closing price on February 1, Bloomberg reports.

It gives Tesla a short-term energy storage technology that its chief executive officer Elon Musk describes as a key to the future of EVs.

Tesla’s decision to pay for the small deal in stock underscores the need for the company to conserve cash. The carmaker has about US$3.7 billion on its balance sheet and has a US$920 million convertible bond that matures March 1, Bloomberg

says.

It’s Tesla’s fifth acquisition since 2015. It has solar panel installer SolarCity Corp, along with small technology and engineering firms obtained to improve Tesla’s EVs and manufacturing capabilities.