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The Promise of Maxwell

Discussion in 'TSLA Investor Discussions' started by ammulder, Jul 7, 2019.

  1. ammulder

    ammulder '98 GS400 -> P3D+

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    I've read a lots of posts recently talking about Tesla’s unassailable advantage in battery technology just as soon as they incorporate Maxwell’s technology. (In terms of energy density, manufacturing space, etc.)

    But is Maxwell really the only company/only researchers to have gone in this direction? Is there really no competition? It’s not like the rest of the world stopped working on battery improvements in the mean time. What have others accomplished in that time?

    Is it a given that the Maxwell tech will be successfully integrated into Tesla battery lines/packs in, say, the next 6 months?

    I saw someone ask here, if this Maxwell tech was so short term and mind-blowing, how come the rest of the world just let Tesla have it?

    Even supposing all this plays out in Tesla’s favor, will Tesla keep that IP private while giving the rest of their patents away?

    I know there’s a lot of promise here, I’m just wondering if it’s as amazing and as close to fruition and will give as much of a lead over competitors as some seem to claim. It wouldn’t surprise me at all if everyone’s batteries improved over the next year, but will Tesla outpace the rest by a substantial margin?
     
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  2. ggr

    ggr Roadster R80 537, SigS P85 29, M3P 80k

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    Tesla was working with Maxwell for some time in advance of deciding to buy the company. Obviously they liked what they saw, and saw that there were directions that Maxwell could go in that would be advantageous for Tesla, but Maxwell didn't have access to the kind of resources that Tesla had. Cash is only one resource. Access to Grohmann is another. It's also possible that Elon or JB or another battery-literate genius at Tesla thought of something that even Maxwell hadn't thought of.

    "How come the rest of the world...?". How many people in the world were really in a position to evaluate Maxwell's technology? Excluding the ones who work at Tesla, not all that many. And where do they all work? Mostly at Japanese, Chinese and South Korean companies, but not as top management, instead buried layers-deep in bureaucracies.

    Here's a story that happened in real life that illustrates the kind of thinking. I worked at one of the largest cellphone chip manufacturing companies doing security research, Qualcomm. We identified a company doing top class security hardware, which had the capability to ensure that only we could turn on functionality in our chips. Being Fabless, most of our chips were made in Taiwan or South Korea, and we had the problem that there were a lot of phone handsets with chips in them that looked a lot like our chips but were never appearing on our royalty reports. This company's technology would make sure that no usable chips fell off the back of the fab production lines. At first we licensed the technology, for numbers in the millions per year. I championed the effort to instead buy the company, which had other intellectual property we could use too, but I had enormous difficulty getting the idea through to top management. I kept trying and eventually got approval at CEO level to offer a certain amount (couple hundred million), but the lawyer in the finance department had to do the negotiation. Every few weeks I'd talk to the CEO at the target company and he'd tell me that he had heard nothing from us. Then one day he stopped taking/returning phone calls, because (as we later found out) he had done a handshake deal at a lower price with another company, and they had a two-month no-shop provision. Anyway, we lost the deal, and it's been enormously effective for the company that did it instead. It's really hard for "just an engineer" to get management to correctly value something that is of long term benefit but doesn't fit the existing model in the short term. Anyway, this is just my sour grapes at this point, part of the reason I left.
     
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  3. traxila

    traxila Member

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    I know it is very tempting and easy to buy into the relentless propaganda that the market always knows best and that there are no good opportunities out there because the smart money has vetted the situation and uncovered the flaws and issues which they are not going to bother to inform you about and passed, but I know in EVERYONE’s experience, this is simply not how the world works.

    Opportunities and undiscovered processes abound, usually to be capitalized upon by people that are willing to think differently and move fast. The biggest problem in the world today holding civilization back are the locked in, rent seeking mega corporations looking to basically crush innovation and enslave everyone. As far as they are concerned, the last technology improvement ever should be the one that is cashing then out on a regular basis. Technology lock in is a bitch for sure in every industry for new and improved ideas and processes.

    But these same mega players are the ones that are disrupted the hardest when someone finally cracks into their insulated world. Examples are plentiful, but I think it is harder to find two better examples than the energy and car industry of today.

    Either you believe that Tesla and Maxwell have figured a better battery that can be mass produced and know how to recognize this fact or you doubt it. I have no doubt that the Maxwell tech is real and that it will be applied to Tesla’s tremendous battery advantage. I am unsure of the timeline, but they did not just start working on it. You have to believe that plans are already in place or being finalized to build out the first production line of the most advanced batteries the world has ever seen. Yes I am excited. All EV fans should be.
     
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  4. Eriamjh1138

    Eriamjh1138 Member

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    I believe Maxwell battery tech is 3-7 years out for mass production at Tesla. Maybe more.
     
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  5. ReflexFunds

    ReflexFunds Member

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    I think there are several reasons to think Maxwell technology could be very close to rollout:
    • Maxwell has been working on this for a long time already
    • Tesla has been working with Maxwell since 2016.
    • The Maxwell manufacturing process is not a new lab demonstration only process. It is a commercial process that they already use in their ultra-capacitor factory in Arizona - Tesla now have staff already trained for mass production of electrodes using Maxwell's method.
    • The Maxwell technology does not require a new battery chemistry. This can initially be integrated into Tesla's existing battery chemistries - but of course, it opens up many doors to future chemistry developments.
    • Tesla has heavily hinted that they are close to taking battery cell production in-house. Although, this doesn't necessarily have to use Maxwell tech initially. Panasonic seems to be very confused why Tesla isn't giving them a contract for Model Y production - suggesting to me that Tesla has plans to manufacture Model Y cells itself.
     
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  6. ReflexFunds

    ReflexFunds Member

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    This was Panasonic's CEO in May

    He seems genuinely uncertain what Tesla's plan is for Model Y.

    In contrast at Tesla's AGM, Tesla management seemed to be very clear what their plan is, and it sounds like they plan to tell us at their battery investor day later this summer or later this year:

    Tesla taking cell production in-house has become even more clear with CNBC's recent article: Tesla has a secret lab trying to build its own battery cells to reduce dependence on Panasonic
    It's also worth noting Tesla has had an in-house battery cell R&D team for close to 10 years, has also had a research partnership with one of the world's leading researchers (Jeff Dahn) and his team since 2016, in addition to the new electrode manufacturing IP and experience bought with Maxwell.
     
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  7. SOULPEDL

    SOULPEDL Member

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    Isn't the battery constraint with raw materials? Hence the comment by Musk at the last Annual where he hinted at getting into mining. I'm not sure Maxwell changes the battery production problem, just a nice cost savings by not having to evaporate the solvents (plus other performance benefits). You still need the raw materials.
     
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  8. Stars aligned

    Stars aligned Member

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    Look no further than Maxwell technology, increasing electrode manufacturing capacity 16 fold. And increasing energy density.

    Before I forget, buy cells from other manufacturers from China. And then, all over the world battery manufacturing capacity is being built up. There are good reports out there.

    If it is the way to go, there will be exponential growth....
     
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  9. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    That is the long term battery constraint. What Tesla is facing now is a short term one because Pansonic didn't deliver the production they said they would.
     
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  10. ReflexFunds

    ReflexFunds Member

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    #10 ReflexFunds, Jul 7, 2019
    Last edited: Jul 7, 2019
    I personally see a high probability Tesla are planning to build battery cells for all future projects (Y, semi, Pickup, GF3 stage 2, GF4) in-house. Whether or not this initially uses Maxwell technology or whether Maxwell electrodes are integrated at a later date I don't know. Building cells in-houses means moving parts of the supply chain in-house which were previously organised by Panasonic. In particular Tesla needs its own contracts or M&A of metals plants for cathode materials Nickel and Cobalt (mostly or all sourced via Sumitomo currently) and Lithium (Panasonic or Tesla may have had a direct relationship with ALB for lithium historically). Last year Tesla signed contracts with Kidman (speculative lithium junior) and Ganfeng (debatably lithium market leader) for Lithium supply. There is no shortage of battery metal resources, but it is important to secure supply of battery quality end products and to fund capex into capacity expansion for these processed chemicals.

    There will be high risk with the ramp up of in-house cell production (however I expect Tesla has been preparing for this project for 10 years), and if there are issues, i definitely agree that Y will be prioritised ahead of semi - I think this is why Elon flagged cell supply risks/product complexity considerations for cell use prioritisation. But I expect Semi to remain an extremely high priority project.

    For GF3, and with China's removal of its local battery supply whitelist, my base case is now for all stage 1 supply to be from Panasonic. Likely exported from GF1 in the US at first, but potentially switched to supply from Panasonic's S/X cell factory in Japan if S/X are switched to 2170 cells from GF1.
     
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  11. mongo

    mongo Well-Known Member

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    Only in terms of space required. You still need 16x the equipment capacity.
     
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  12. Stars aligned

    Stars aligned Member

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    That's the view in the rear mirror, several weeks back. Doubt it is still true.
     
  13. Antares Nebula

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    #13 Antares Nebula, Jul 7, 2019
    Last edited: Jul 7, 2019
    I probably get down voted for this, but one thing people need to consider is the price Tesla paid for Maxwell. Say about 200-250M. That's really not a lot. Suggests to me that Maxwell tech is not some holy grail.

    But it is obviously important to some extent to Tesla's strategy. And what exactly that is remains to be seen.

    I think everybody (like Galileo Russell) going on about how Maxwell is going to transform Tesla is maybe reaching a bit. Personally I'm taking a wait and see attitude. If Maxwell really was some revolutionary breakthrough tech, there would have been a major bidding war and it's price would have been over 1 billion, considering how important battery tech is to a future trillion dollar auto industry. Either that, or everybody else, including Maxwell, is not seeing what only Tesla is seeing -- a distinct (but unlikely) possibility. Let's see what happens...
     
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  14. EVMeister

    EVMeister Lover of Tesla, driver of I-PACE

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    That assumes others that would bid actually knew how important the technology might be or how to actually put it to use. From comments here, people have suggested that Tesla has been working with Maxwell technology and building up an understanding of how to integrate it for some time before the actual acquisition. See also The Promise of Maxwell.
     
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  15. ReflexFunds

    ReflexFunds Member

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    #15 ReflexFunds, Jul 7, 2019
    Last edited: Jul 7, 2019
    I think Tesla was the only company in a position to make Maxwell's technology valuable. They are the only company with the agility and EV scale to role out a new technology quickly and at scale. They are also the only car company with 10 years of battery cell R&D, the only car company whose leaders truly understand the technology, and it appears the only company working with Maxwell since 2016 on their dry electrode process. Major battery companies like Panasonic and LG are likely far too conservative to throw away some of their current IP to go with a new high risk manufacturing method, particularly as they would have only had a few months for due diligence vs Tesla's few years.

    I don't think the Maxwell price tells us much other than that Tesla has no real competition in the EV space, and that the public markets are very bad at pricing high risk innovation, both of which we all know already.
     
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  16. LN1_Casey

    LN1_Casey Member

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    I think the likelihood of other car companies just not understanding the tech advantage that Maxwell presented was high. The other major brands are still years behind Tesla, and still struggle not to put a transmission tunnel in the rear passenger foot well of their electric vehicles.
     
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  17. Artful Dodger

    Artful Dodger ♫ sniffin' the mornin' cool ♫

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    Jeff Dahn holds no recipes. He is primarily a taste tester, with an in-house kitchen to reproduce the recipies. Call him the Martha Stewart of battery cells, if you will.

    Cheers!
     
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  18. StealthP3D

    StealthP3D Active Member

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    You can interpret it however you want. Wasn't Maxwell owned primarily by the scientists that invented their technology? And didn't the deal include substantial TSLA shares? A quarter of a billion dollars is not exactly pocket change to most people and if this accelerates Tesla's success, the payout could be much more in a relatively short timeframe.

    Common sense says that Maxwell owners could see just how valuable this would be to a company like Tesla and they want a substantial piece of the action (via their TSLA shares)!

    You see how interpretation matters? :rolleyes:
     
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  19. Foghat

    Foghat Active Member

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    Other manufacturers weren't/aren't capable of utilizing Maxwell developments at Tesla's scale. Again, Tesla is mass producing leading BEV technology and infrastructure (and rapidly growing) at a level no one in the world is doing.

    The inability to scale an exclusively focused BEV auto that has multi year plans on innovation and iteration is what the Maxwell acquisition is about. The other majors ICE companies conflicting internal combustion logistical infrastructure prohibits them from making such an investment, since it would entail dramatically committing most of its resources to BEV tech at scale. To them, it is exceedingly overvalued as a result of this. Also, I don't think they even understand or want to understand how it is valuable. It's not even where they are going with their companies at all, I mean if they did they might have bought it just to delay Tesla or make money off Tesla utilization of the patents. To me they really don't see what value is there. They'd rather wait and see, while selling ICE and compliance cars in the meantime.

    Tesla is able to pay the price now and see a significant return on investment in relatively soon. It's about the entire process for Tesla, which is why the others can't derive the value. The machine the makes the machine will benefit, in addition to Tesla energy and associated Tesla products. It's clear there is a bigger picture, the combined puzzle pieces of value that couldn't be obtained by anyone else other than Tesla with Maxwell. Maxwell understood this as well and agreed to the terms of sale after some negotiations.
     
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  20. pnungesser

    pnungesser Member

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    Other car manufacturers weren't interested in Maxwell because they are not vertically integrated, don't manufacture batteries and don't want to, and buy batteries like a commodity on the market. Their mistake! The competition for Maxwell would have come from LG, Pano, etc. I'm not sure why they did not pursue Maxwell. Just my WAG.
     
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