Author:  Alex Koyfman  published: Thu, May 09, 2019  Wealth Daily


Dear Reader,

Earlier this year, Tesla Inc. (NASDAQ: TSLA) made headlines when it acquired San Diego-based ultracapacitor and battery maker Maxwell for $218 million at a share price of $4.75 — a 56% premium to the company’s previous valuation of $140 million.

While Maxwell is primarily known for manufacturing ultracapacitors, Tesla’s interest was more focused on its new acquisition’s dry electrode technology to use in Li-ion battery cells.

One of the greatest advantages Maxwell’s dry electrodes bring to the equation is a much higher capacity retention rate.

Its batteries have proven to retain as much as 90% of their capacity through 1,500 charge cycles, a marked improvement over Tesla’s existing battery arrays.

Tesla commented on the acquisition:

We are always looking for potential acquisitions that make sense for the business and support Tesla’s mission to accelerate the world’s transition to sustainable energy.

Tesla’s Thirsty

This news demonstrates two facts that have long been known to Tesla insiders:

  1. The issue of battery performance has been and remains one of the company’s biggest concerns, not just in the interest of its vehicle line, but also to boost the performance of its distributed power storage system, the Powerwall.
  2. It’s not afraid to shell out some money, even at a substantial markup to market price, to address that concern.

However, the acquisition of Maxwell is by no means the end of the story for Tesla’s quest to build the perfect battery.

Dry electrode technology will help improve its battery arrays incrementally, but for a truly paradigm-shifting evolution, Tesla will have to turn to another technology: artificial intelligence.

I’ve written to you a few times now about another tech company, this one based in Canada, that has been using advanced AI algorithms to improve the performance of electric motors.

This tech firm has figured out a way to apply intelligent current management to the coils within electrical motors to increase efficiency and torque output, depending on the given speed of the motor.

The First Major Evolution of the Electric Motor Since Michael Faraday’s Prototype

This innovation might seem hard to grasp for the layman, but it’s such a substantial improvement over standard “dumb” motors that it’s now being heralded as the first major evolution of electric motor technology since the very advent of the device almost 200 years ago.

In simpler terms, it was like going from a child’s tricycle to a competition ten-speed.

The implications for this tech, called dynamic power management (DPM), are enormous, as it affects billions of devices in use around the world, from the smallest electrical motors, like the kind that make your cell phone vibrate, all the way up to the massive power generators that hydroelectric dams use to turn rotational force into electricity.

In fact, more than half of the total energy produced by humanity is consumed by electric motors, and a staggering 99% of it comes from electrical generators — making DPM perhaps the most influential, not to mention valuable, application of artificial technology we’ve seen yet.

But why am I talking about DPM and electrical motors when we started this conversation about batteries?

First Came the “Smart Motor”; Now Meet the “Smart Battery”

Well, here’s where it gets really interesting for the battery market, and for Tesla.

This small Canadian company, whose valuation is just one-tenth that of Maxwell prior to the acquisition, recently applied its dynamic power management approach to the lithium-ion battery — the very same kind of battery Tesla puts in its cars, and the very same type Maxwell’s dry electrodes will now help improve.

DPM, applied to the lithium battery, will produce up to a 10% improvement in efficiency in terms of charging and discharging.

It works by isolating weaker- and stronger-performing cells (a typical Tesla battery array contains more than 7,000, all of which perform at varying levels of efficiency) and applying charge accordingly.

It’s the very same concept it uses to make motors more efficient, more powerful, and more reliable, only now with batteries.

Combined with its motors, a complete system equipped with DPM will dramatically outperform anything Tesla has today, rendering its cars and its power storage systems hopelessly obsolete.