Maxwell Tech to boost fuel efficiency with ultracapacitors

San Diego-based Maxwell Technologies (Nasdaq:MXWL) said today it signed its second deal to sell ultracapacitors to Hanover, Germany's Continental AG (OTC:CTTAY), which supplies electronics and mechatronics to automakers. 

Maxwell Vice President Mike Sund said the deal calls for his company to begin delivering pre-production cells in the next couple months, with delivery of production cells to begin in the fourth quarter. The ultracapacitors are destined to be the energy storage element of Continental's voltage stabilization system (VSS) in vehicles for an unnamed automaker starting in 2010. 

Financial terms of the deal were undisclosed, but Sund told the Cleantech Group he expects the supply deal to call for thousands-to-tens-of-thousands of units the first year, with significant expansion of the contract in the second year.

Shares of Maxwell were up nearly 14 percent to close at $18.04 today, while Continental saw its shares rise 7.55 percent to $57.70.

The ultracapacitors are to be used to power stop-start systems, which turn off the internal combustion engine when the vehicle slows or coasts. When the driver accelerates, the ultracapacitor provides bursts of power to re-start the engine, minimizing fuel use and relieving the vehicle's battery of high currents and repeated cycling that can shorten battery life.

"It can improve fuel efficiency on a basic level in the 5 to 10 percent range," Sund said. "In heavy stop-start urban driving, it could get up to 20 percent or more savings." 

Any internal combustion engine could benefit from the technology, opening up potential markets across the globe as fuel prices remain high, Sund said. However, the European Union is currently the fastest growing market for stop-start technology because of its increasingly stringent limits for vehicle emissions, he said.

"The EU has been more aggressive in mandating emissions reductions, and they have actually passed legislation for [an average of] 135 grams per kilometer for 65 percent of new cars in 2012," he said. "U.S. automakers have a little more time, but they will be under similar pressure in the next couple years."

Once the ultracapacitors are part of the VSS, they can multitask and offer other benefits, Sund noted. Continental plans to use Maxwell's ultracapacitors to provide a reservoir of standby power for the unnamed OEM in today's deal, ensuring the stable functioning of the vehicle's electrical system when there are multiple power demands.

"Many of the luxury vehicles have gadgets such as seat heaters, and it's possible to cause a voltage surge, which glitches the microprocessors," Sund said. "The ultracapacitor could provide a reservoir of instantly available power to take care of mismatches."

Maxwell and Continental signed a deal last year to use ultracapacitors to stabilize vehicles' electrical systems for another unnamed automaker beginning in 2009. Sund said the two automakers are different companies, and the automaker from the 2008 deal decided to delay the launch of the project until 2011 (see Maxwell, Continental AG in ultracapacitor contract).

Also in the automotive sector, Maxwell signed a deal in 2007 with European automotive parts supplier Valeo to store energy in ultracapacitors as part of a regenerative braking system (see France gets EU approval for green car funding).

The competition in ultracapacitors includes EEStor, the secretive Cedar Park, Texas-based startup that plans to supply ultracapacitors to Toronto-based electric vehicle maker Zenn Motor for full-speed electric vehicles starting in 2010 (see Zenn CEO reveals details of EEStor's progress). Seattle startup EnerG2 plans to begin shipping ultracapacitors this year for electric rail systems and heavy-duty vehicles (see EnerG2 emerges from stealth with ultracapacitor material). 

Maxwell currently has the capacity to produce millions of cells a year for various applications, including energy storage in wind turbines.

The company is also continuing to fill orders of ultracapacitors for about 850 hybrid transit buses in China. In April, Maxwell scored three contracts worth a total of $13.5 million to provide technology to support regenerative braking systems in diesel-hybrid drive trains (see Shares of Maxwell rise on Chinese ultracapacitor deals). Sund said the company expects to see further growth in that market.

The company is also continuing to work with Johnson Controls-Saft on developing cheaper, more effective, and more energy-efficient lithium-ion battery electrodes. Sund said Maxwell developed a dry process to make electrodes, as opposed to the typical solvent-based process (see Johnson Controls-Saft, Maxwell Tech collaborate on batteries).

Maxwell has completed a contract with Latham, N.Y.'s Plug Power (Nasdaq: PLUG) to deliver about 1,000 ultracapacitors to supplement the power provided by fuel cells in indoor forklifts (see Maxwell Tech, Plug Power in fuel cell deal).

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