Tesla completes Maxwell acquisition, ushers another era of battery breakthroughs

Simon Alvarez

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Posted on May 16, 2019

Tesla recently confirmed that it had completed the acquisition of Maxwell Technologies Inc., a California-based company that specializes in ultracapacitors and batteries. In a press release on Thursday, the electric car maker noted that it is transferring stocks worth over $235 million to take over Maxwell.

The acquisition of Maxwell Technologies could usher in new improvements in Tesla’s battery technology, which is already among the best in the electric vehicle market today. Before its acquisition by Tesla, Maxwell had been developing dry electrode technologies that could be utilized to create ultracapacitors, which can store large amounts of electrical charge without losing energy. Industry watchers have noted that ultracapacitors could eventually be an alternative to today’s batteries, particularly as they have the potential to be safer and more reliable.

Tesla is in a constant process of improving its vehicles technologies, with President of Automotive Jerome Guillen noting in a previous interview that the batteries of the company are always in a process of improvement. With Maxwell’s technology in its repertoire, Tesla could potentially improve its batteries, widening the gap between itself and its competitors in the electric car market further.

Maxwell has previously stated that its dry electrode technology has demonstrated an energy density of 300 Wh/kg, and that it had “identified” a path to path to 500 Wh/kg. A Tesla Model 3 battery pack, on the other hand, has an energy density of 272 Wh/liter, with the 2170 cells producing 207 Wh/kg, according to Extreme Tech.

Maxwell Technologies is the fifth company that has been acquired by the electric car maker. Before Maxwell, Tesla had acquired Riviera Tool LLC, a company that specializes in stamping die systems; SolarCity, a provider of solar energy services; Grohmann Engineering, a company that produces Tesla’s robots for production; and Perbix, a company that creates highly automated production equipment.

Following is Tesla’s press release on Maxwell’s acquisition.

PALO ALTO, Calif., May 16, 2019 (GLOBE NEWSWIRE) — Tesla, Inc. (NASDAQ: TSLA) today announced the successful completion of its previously announced offer to exchange all outstanding shares of common stock of Maxwell Technologies, Inc. (“Maxwell”) for 0.0193 of a share of Tesla common stock, together with cash in lieu of any fractional shares of Tesla common stock, without interest and less any applicable withholding taxes.

The exchange offer expired at 11:59 p.m., Eastern Time, on Wednesday, May 15, 2019.  As of the expiration of the exchange offer, a total of approximately 36,764,342 shares of common stock of Maxwell were validly tendered in the exchange offer and not validly withdrawn, representing approximately 79% of the aggregate voting power of the shares of Maxwell common stock outstanding immediately after the consummation of the exchange offer. All shares of Maxwell common stock that were validly tendered and not validly withdrawn prior to the expiration of the offer have been accepted by Tesla for payment in accordance with the terms of the exchange offer.

Following to the completion of the exchange offer, Tesla completed the acquisition of Maxwell by consummating the second step merger contemplated by the previously announced merger agreement between Tesla and Maxwell. As a result of this merger, all shares of Maxwell stock that were not tendered in Tesla’s exchange offer were cancelled in exchange for the right to receive the same consideration paid for Maxwell stock in the exchange offer.

Tesla completes Maxwell acquisition, ushers another era of battery breakthroughs

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Tesla rolls out improved Model S/X battery thermal management software amid HK fire investigation

Simon Alvarez

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Posted on May 15, 2019

Tesla is rolling out a software update that improves the longevity of the Model S and Model X’s batteries by optimizing the thermal management system of the flagship sedan and SUV’s battery packs.

The safety update is being rolled out to the Model S and X fleet as Tesla continues its investigation into an incident in Hong Kong, which involved a Model S catching fire. According to local media reports, the Model S was in a parking lot when its batteries ignited, resulting in a blaze that took firemen 45 minutes to extinguish. No injuries were reported in the incident. 

Below is a statement from a Tesla spokesperson about the company’s investigation into the Hong Kong fire.

“Our team was on site to offer support to our customer and establish the facts of this incident. We are glad that everyone is safe. While our investigation with authorities is ongoing, we have found that only a few battery modules were affected and the majority of the battery pack is undamaged.

“Tesla battery packs are engineered with a state-of-the-art design so that in the very rare instance a fire does occur, it spreads very slowly and vents heat away from the cabin, alerting occupants that there is an issue and giving them enough time to exit the vehicle. The safety of our customers is our top priority, and if we do identify an issue, we will do whatever is necessary to address it,” the Tesla spokesperson noted.

The company added that the thermal management safety update is currently being rolled out as a precautionary measure for its flagship vehicles. While cases involving a Tesla fire are incredibly few compared to the number of internal combustion fires every year, the electric car maker noted that it is doing what it can to make its vehicles even less likely to catch fire. Below is a statement from a Tesla spokesperson.

“We currently have well over half a million vehicles on the road, which is more than double the number that we had at the beginning of last year, and Tesla’s team of battery experts uses that data to thoroughly investigate incidents that occur and understand the root cause. Although fire incidents involving Tesla vehicles are already extremely rare and our cars are 10 times less likely to experience a fire than a gas car, we believe the right number of incidents to aspire to is zero.

“As we continue our investigation of the root cause, out of an abundance of caution, we are revising charge and thermal management settings on Model S and Model X vehicles via an over-the-air software update that will begin rolling out today, to help further protect the battery and improve battery longevity,” the spokesperson said.

The safety update will be rolled out to the entire Model S and X fleet, which means even early-production vehicles like the Model S 40 and the Model X 60D should receive the optimizations. Tesla also noted that the thermal management updates will not have any effect on the peak charge rates for the flagship sedan and SUV. Thus, Model S and X owners could still enjoy charging their vehicles at peak rates of up to 150 kW from the Supercharger V2 network, which was made possible after Tesla introduced the On-Route Battery Warmup feature to the vehicles last month.

Tesla rolls out improved Model S/X battery thermal management software amid HK fire investigation

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Baillie Gifford praises Tesla’s new leadership, says new CFO is great fit for Elon Musk

Simon Alvarez

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Posted on May 14, 2019

Tesla’s (NASDAQ:TSLA) second-largest shareholder, Baillie Gifford, has been consistent with its support of the electric car maker, with James Anderson, a senior partner at the firm, even calling out the unethical activities of the company’s critics last year. Anderson spoke about Tesla again recently during an interview with Barron’s, where he discussed his insights on the company’s current leadership.

Anderson is among the investment world’s most prominent players, overseeing about half of the $37 billion Vanguard International Growth Fund (VWIGX), together with Baillie Gifford’s Tom Coutts and a team from Schroders. During his interview with the publication, Anderson talked about a meeting he had with Tesla Chair Robyn Denholm, whom he met following another interview where he stated that he wouldn’t be against Elon Musk leaving the CEO post and taking another role in the company.

“I went to see Tesla and met with the new chair. You can imagine we discussed this. It was plain to me that Tesla needed to strengthen some of the other voices on the board and encourage a greater degree of understanding on the part of Mr. Musk about his responsibilities. The new chairman made it clear she regards him as a good chief executive,” he said.

Anderson emphasized that Tesla is being led by a stronger team today. He took particular note of Amazon alumnus Sanjay Shah, who has a clear view of the company’s battery and energy front. The Baillie Gifford senior partner also praised Tesla’s new CFO, Zach Kirkhorn, for his close working relationship with Elon Musk. “I like the chief financial officer, who, although young, has the kind of relationship with Musk that allows him to tell Musk things,” Anderson said. 

Kirkhorn took over the CFO duties of Deepak Ahuja, who announced his retirement (for the second time) following the company’s fourth-quarter earnings call. The 34-year-old Kirkhorn’s appointment as Tesla’s CFO proved polarizing, with Tesla critics taking issue with his age and supporters of the company praising him for his years of experience with the company. Despite his age, Kirkhorn has worked for Tesla for years, starting since the days of the original Roadster.

Since his appointment, the new CFO has been visible, participating in Tesla’s first quarter earnings call and joining Elon Musk in an investor call following the company’s announcement of a capital raise. During these sessions, Kirkhorn proved active, responding to inquiries directly in the Q1 earnings and explaining Tesla’s guidance during the investor call.

Apart from providing his insights on Tesla’s leadership, Anderson also noted that Tesla could have raised capital during a far more ideal position. Despite Tesla holding its capital raise at a time when its stock is significantly down, the Baillie Gifford senior partner noted that they remain supportive of Tesla nonetheless. “Ideally, we prefer companies to raise capital when confidence and share prices are high; otherwise they have to issue more shares to raise the same amount of capital. Obviously, Tesla’s share price today is considerably lower than it was eight or nine months ago, but we remain supportive shareholders,” he said.

As of writing, Tesla stock is trading +2.35% at $232.35 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Baillie Gifford praises Tesla’s new leadership, says new CFO is great fit for Elon Musk

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