Tesla Acquires Maxwell Technologies for Battery Breakthrough



hey guys welcome to the market is open check us out on the market is open calm today we're gonna talk about Tesla acquiring a company called Maxwell technologies mainly for their battery related assets so we're gonna talk a bit about that today first of all please subscribe to our channel we have tons of Tesla videos and stock videos and to stay up to date with love if you would subscribe okay so let's have a look at how these two stocks perform today so Maxwell technologies got acquired for two hundred eighteen million dollars so the stock went up about almost fifty percent today Tesla surprisingly I think it was down for part of the day but it actually closed up which is a positive sign usually the acquirer stock gets hit because they're the ones spending all the money this specifically this transaction was a stock deal so Tesla's paying all in stock instead of cash so you would have you would expect Tesla shares to get diluted when the transaction goes through but obviously investors believe that this acquisition has some value to it so this company Maxwell is pretty interesting so it seems like they're in the early stages of ramping up their battery technology and they even said that they're looking for partners and partnerships with other companies in order to scale up their business so so far it looks like they have a proof-of-concept where they have 300 watt hours per kilogram and in terms of their battery capacity they call this a dry battery electrode at which they say has over 10 percent advantage over wet battery electrodes which I guess our traditional batteries it seems that not only can the batteries hold more energy but there's also a significant cost savings as well as a weight gain because they can hold more energy per kilogram you don't need as much wait for the battery in a car for example and it seems that they also have some breakthrough innovations or at least the path towards that to eliminate something called a first cycle loss which is a problem that lithium-ion batteries have and these a dry battery electrodes seem to be able to overcome that again they're in the early stages of this it seems but obviously Tesla was was happy with what they saw and decided to acquire this company so some of the other reasons why Tesla may have acquired this company well first of all not only do they get the breakthrough technology and all the patents of this company they also get a team of battery experts and people that are sort of developing and experimenting and trying new chemistry's to develop different types of batteries or new types of batteries in order to make them more efficient so that's great if Tesla can take that technology and integrate it into their company the other advantage of acquiring this company instead of sort of developing their own technology from the ground up is to block competitors from from acquiring this technology so now Tesla has control over this technology other competitors will have to look elsewhere for battery technology or develop their own somewhere else that said Tesla does give away all of its patents for free so a competitive competitors can probably use this technology but but again that's probably better than a competitor buying this company and then Tesla would have a problem using using their patents okay so in addition to the the battery experts that they get the whole team at Maxwell and the breakthrough technology all of these new chemistry's and processes for making batteries for two hundred eighteen million dollars of stock Tesla also acquires the company's balance sheet as well they do lose money every quarter about 10 million dollars less than 10 million dollars a quarter which is Tesla can can easily handle that with their income statement but the company does have have about 50 million dollars in cash they divested a part of their business in order to become sort of a pure play on batteries and because of that they have all this cash on their balance sheet and they also have a deal with Volvo for a hundred million that's lifetime revenue again that's revenue but it's a deal with Volvo who knows if Tesla will will keep will keep these deals but it'll be interesting if they sort of supply other companies with Tesla's technology seems that Tesla's already doing that they're already supplying power packs for for charging stations for other companies so it seems that maybe this deal will will help desk let's bend and be a supplier to other car companies as well as develop its own battery technology for itself and by the way this is just an aside it actually has nothing to do with today's acquisition but it does have to do with batteries this guy here Jack Ricard he tore apart Tesla's Model 3 21 70 battery and he told us what was in it now this is a lithium ion battery however you might be surprised to know that only 2 percent of it is lithium so when people are talking about lithium ion like there's not very much lithium actually in it most of it is actually made up of nickel I think 85% of the cathode was nickel and the anode is made out of graphite so graphite is is fairly cheap it's like the same stuff that's in your pencil but nickel is quite expensive so it seems that I think even Elon talked about this before but the price of the battery is very reliant on the price of nickel and there is a bit of cobalt in it cobalt is sort of an expensive material and it's it's comes from countries in questionable ways so Tesla has been phasing that out one of the reasons they bought or they didn't buy Maxwell in order to phase out cobalt I think Tesla's doing that on their own way I just thought it was interesting that most of the battery I was actually made of nickel okay so more about this acquisition so Tesla spent 218 million dollars as I mentioned now that's not a lot of money that's not a lot of stock for Tesla they have like a 60 billion dollar market cap so this is about like 0.3% of the market cap in order to acquire that is what they consider breakthrough technology so though so this company maxwell has already have customers they have an advanced battery technology and a process of manufacturing this hopefully they can integrate it with Tesla in order to scale up what's perfect about this is that it fits in with the automotive and energy storage solutions so they're designing these batteries for cars and they're also designing them for like Tesla style power packs and charging stations for example now I also mentioned that they divested part of their business and now they're a pure play so this acquisition was fairly low risk for Tesla two hundred million dollars is nothing for them it's not a lot for them and losses of ten million dollars is really yet not a lot for Tesla I mean they they bought Solar City which was losing like two billion dollars a year and and they seem to have sort of gotten over that but if this battery technology does prove to be like what it's what they say that it that it is the whole purpose of this acquisition I believe was to sort of integrate it in with Tesla and to reach scale Tesla does have more money than these guys believe it or not Tesla has a they have over three billion dollars whereas these guys have 50 million dollars so in cash so a test I can definitely invest more into this and not only that but they can put it all in all of their new cars and if this new battery technology can cut costs then Tesla can save thousands of dollars per car they can lower the weight of the car which would make it faster we can have a longer range and so there's a lot of benefits if this turns out to be what they say it so is Maxwell the real deal so it'll be hard to tell it'll probably take a couple years for us to even tell it'll take a couple years for us for for Tesla to to even integrate it in into their company and sort of create manufacturing processes that have scale for this technology but even Elon has tweeted that he he was sort of looking he was in the market for different types of battery technology and he didn't come across anything that looked reliable or looked like something that he would have been interested in so because he chose Maxwell it seems that perhaps maybe Tesla tested it out and they were happy with what they saw and Elon I guess must really believe that these guys are the real deal and that's probably why they're getting inquired so normally my rule of thumb is actually a friend of Mines rule of thumb is is that not to believe anything that has to do with chemistry and in terms of being integrated into a product for consumers so it's sort of like I'll believe it when I see it type scenario because it could be years down the road as I wouldn't get too excited about this until I sort of see the results of it I think right away you'll see an impact on the income statement a small impact from the losses of this company you'll see the benefits of this company so it could take a couple quarters or even years down the road before you start seeing the benefits of this but the fact that Tesla is sort of like a results-driven company there Ilan's like a no fluff type person like it leads me to believe that they that they do have something and I am happy that Tesla has purchased this it seems that it's a low-risk acquisition in order to have great rewards so they they could have great cost savings as I mentioned they'll stay ahead of the competition with great battery technology in terms of that's higher energy density which leads to more range in cars higher like output from the batteries and lighter weight for the cards so in all I think the market actually behaved properly today they didn't bid up or take down Tesla stock too much and it seems like a small acquisition and we'll see where this goes thank you so much for watching please subscribe to our Channel and smash that like button

28 Comments

  1. Daniel Filippus said:

    If you buy a company with all stocks from your own company, doesn't that company now own you instead?

    June 30, 2019
    Reply
  2. Kalyani Aditya said:

    Do you think that Lithium ion battery bank and super capacitors both clubbed up and be used in EV ? Is there any posiibility that they work together and there wouldn’t be any casualities? Pl clarify!

    June 30, 2019
    Reply
  3. Eric Kosak said:

    Keep it real.

    June 30, 2019
    Reply
  4. shobhit seth said:

    Graffin battery r the real future .

    June 30, 2019
    Reply
  5. Barbara Brinkmeyer said:

    Market is wide open.

    June 30, 2019
    Reply
  6. George Hawley said:

    Pretty lightweight report from a technical point of view but the caveat of wait and see is sensible.

    June 30, 2019
    Reply
  7. Enco 8 said:

    Is Tesla going to compete whit their partner Panasonic now the purchased a battery company?

    June 30, 2019
    Reply
  8. Darth Awar said:

    Dry Batteries are better known as Solid State Batteries!!!

    June 30, 2019
    Reply
  9. shanefanon said:

    Smart move.

    June 30, 2019
    Reply
  10. don frank said:

    Maxwell is not up because of this deal. It was manipulated down over the past few years, and especially over the last few months. Anyone who invested in Maxwell in the last 10 years would have never made any money. The best case scenario happened for an investment in Maxwell (got bought out) and Maxwell investors got screwed. Unless somehow someone knew to buy in the past month. I didn't press the like or dislike button either. Perhaps you could do more videos on boiler room stock sales, Maxwell was one of those.

    June 30, 2019
    Reply
  11. Josh Schwartz said:

    I think the one dislike is from a GM shareholder!

    June 30, 2019
    Reply
  12. Leigh Amos said:

    It may not be Batteries. But the ultraCap to protect the abuse of the
    batteries because of the Regen braking and superchargers? lookup
    Riversimple <-car it will show you what the Caps are for

    June 30, 2019
    Reply
  13. brinbrin62 62200 said:

    Thunderf00t / Why Tesla batteries SUCK!! -> https://www.youtube.com/watch?v=3K43XC9J82Q
    That Maxwell acquisition will not give the tech leap we'd need.

    June 30, 2019
    Reply
  14. Hung Tran said:

    Check out Skeleton Ultracaps which uses graphene and buses and chargers in France and China are using them.
    Holds 50km per quick charge, i had been waiting ever since first model S came out.

    Caps are known to electronic, especially the power amp in car audio are useful, i learn it helped the car starts up so much easier with the cranking amp

    June 30, 2019
    Reply
  15. Roger Starkey said:

    Elons attitude to battery tech??
    Reminds me of
    https://youtu.be/Q54lVO7elt0

    UK viewers will understand.

    June 30, 2019
    Reply
  16. Tag Makers Pet Tags said:

    There could be a situation in the not-too-distant future when car makers the world over are begging Tesla to sell them their battery packs and related electro-tech… they become the "Cummins Diesel" of the EV auto industry. Volvo may be an interesting experiement for Tesla in this regard. Volvo, a relatively small player in the global auto industry, does not pose a threat to Tesla, but shares (in general) their vision for an EV future. Volvo EV's could become Teslas, just with the Volvo badge. It then follows that in order for full electro-mechanical integration to work (ie: all components in the car need to work off one central computer system), automakers would then beg Tesla for its computer-tech too. How ironic it would be if most cars on the road in 2030 happen to be Teslas, regardless of whether they are branded VW, Audi, Peugeot, Mercedes, Toyota, Ford, GM….
    Precedents have been set… IBM allowed Microsoft to own DOS, and what followed was practically every computer maker (aside from Apple) based their PC's on Microsoft's DOS – and Microsoft became one of the world's most valuable companies.

    June 30, 2019
    Reply
  17. Michael Valente said:

    Im thinking that Tesla has been working with Maxwell for a while. They may be already using their tech in their semi truck and maybe even in their next gen roadster.

    June 30, 2019
    Reply
  18. Argasy Argasy2 said:

    I smashed my like button, now its broken. =(

    June 30, 2019
    Reply
  19. Arnis said:

    If Tesla integrates supercap bank they can slightly tune chemistry to be less capable of output and more capable in other specs. There is no need for huge power output if there is a capacitor bank. It just has to accept charge rate of at least 130-150kW (100kWh pack)

    June 30, 2019
    Reply
  20. duke1duke1 said:

    They should make a short haul plane if the claims about density are correct. Or release the patent because that energy density level makes short haul electric aircraft possible.

    June 30, 2019
    Reply
  21. Roger Starkey said:

    The supercaps could be just as important

    June 30, 2019
    Reply
  22. Roger Starkey said:

    Tesla announced ANOTHER battery!
    https://insideevs.com/new-battery-cell-patented-by-tesla/

    June 30, 2019
    Reply
  23. goodfella21f said:

    Do they make coffee too?

    June 30, 2019
    Reply
  24. RedTriangle53 said:

    I don't believe it will take that long to integrate. Maxwell is an old company with working prototypes. Tesla works at a breakneck pace as well, so I think they are making this acquisition with the intent to use their technology for every future new model, meaning we will likely see it implemented either with the reveal of model y or with the release of the $35k model 3. Next level battery technology like this is such a huge advantage that I can't imagine it not being one of their absolute top priorities going forward.

    June 30, 2019
    Reply
  25. ron adami said:

    According to Maxwell's website, they are primarily an ultracapacitor company that tangentially get into batteries by incorporating lithium into their caps and they develop dry electrodes which I think has to do with there charging characteristics. The vid doesn't mention ultracaps

    June 30, 2019
    Reply
  26. Tony Chong said:

    Is Maxwell Tech a subsidiary of Hitachi ?

    June 30, 2019
    Reply
  27. Tadd Awesome said:

    smart comment about chemistry πŸ˜‰

    June 30, 2019
    Reply
  28. Peter W said:

    Great video, thanks. Way more informative than CNBC!

    June 30, 2019
    Reply

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