Tesla Signals Shift to Ultracapacitor Battery Future With Maxwell Technologies Acquisition

Early this week consumer electronics company Panasonic Corporation reported shares have fallen nearly 6.5 percent after a significant drop in quarter earnings.  Shifting much of their operation into electric vehicle battery manufacturing, the company has cut its full-year outlook now that its EV partner Tesla Inc has branched out for more battery tech collaboration. 

The data speaks for itself:  the first full week of February starts with the Japanese company chopping 9 percent from its full operating profit outlook after reporting a drop of 19 percent in the final quarter of 2018.  Panasonic blames weak demand for both automobile components and factory equipment in China, who is suffering from a slowing economy. 

Both of these numbers hit limits that were far lower than what analysts had estimates.  However, it probably did not help much that EV maker Tesla, announced later on Monday, its plan to buy the US energy storage company Maxwell Technologies, Inc. 

If you don’t know who that is, Maxwell Technologies, Inc sells ultracapacitor cells to both General Motors Co and [Volkswagen AG subsidiary] Lamborghini.  And, if you don’t know what ultracapacitors are, they store electricity and complement basic battery cells.  What makes ultracapacitors different—or special, really—is that they rely on a shorter charge time but have longer discharge rates.  

The thing about ultracapacitors is that they actually don’t hold more energy than traditional lithium-ion batteries, which is what Tesla had been relying on until signaling this shift.  So now analysts theorize that the idea is to complement traditional batteries with these ultracapacitors to retain energy storage while improving charging capabilities. 

With all that in mind, industry analysts in Japan point at Panasonic’s outlook is a big concern for investors, knowing that the Tesla-Maxwell deal will definitely impact Panasonic, but it is unclear to what extent right now.  Indeed, Tokai Tokyo Research Center analyst Masahiko Ishino comments, “The latest earnings have revealed how tough the situation is for Panasonic.”

The reason losing the Tesla deal to Maxwell is such a big problem is because Panasonic had exclusivity rights.  This means that Tesla Chief Executive Elon Musk can pursue battery sources for his US EV maker from several international companies: essentially he can shop for the best deal.