In an acquisition that is aimed at bringing the cost of its built-for-masses electric car — the Model 3, Tesla has announced that is acquiring energy storage company Maxwell Technologies Inc for $218 million in an all-stock deal. The deal’s prime intention figures out to bringing down Model 3 costs further, as Tesla surges production.

Maxwell Technologies on its end has developed a unique, patented “dry electrode” technology that the company claims, could significantly increase the driving range and reduce the cost of electric vehicle batteries. According to a Reuters report, Maxwell Tech talked about this tech in an investor presentation in January, and aid it expected strategic alliances “within six months” centered around this technology.

Another important tech that Maxwell Technologies has mastered, is ‘Ultracapacitors’. When combined with a regular battery, ultracapacitors can help store power to the peak, making them crucially relevant for electric car makers. In a manner similar to how batteries work, a single ultracapacitor cell consists of a positive and negative electrode, separated by an electrolyte. The difference however is in the manner energy is stored. While traditional batteries store energy chemically, ultracapacitors store energy electrostatically.

Maxwell’s ultracapcitor business directly aligns with Tesla’s energy storage business pretty well. The acquisition hence makes sense in a variety of strategic notions. Volvo-owner Geely Holding Group during a deal with Maxwell that was announced last may, mentioned the latter’s ultracapacitor technology as helping to deliver “peak power” for hybrid cars.

Tesla’s current offer puts a value of $4.75 on each Maxwell share, representing a 55 percent premium to the stock’s closing price on Friday, the companies said. Maxwell shares rose to trade at $4.58.Maxwell expects the deal, which has already been approved by its board, to close in the second quarter of 2019, or shortly thereafter.

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