MXWL's Ultra Capacitors for China

Maxwell Technologies Inc. (MXWL - Analyst Report) announced that its ultra capacitors will be used by Zhengzhou Yutong Bus Co. Ltd. (Yutong) for energy storage and power delivery in fuel-efficient, low-emission, diesel-electric hybrid buses.

Yutong, China's largest bus manufacturer, produces buses for public transit agencies worldwide. It is one of China's top 500 enterprises, with additional strategic business activities, including construction machinery, automotive parts and components and real estate.

Maxwell offers ultra capacitor cells, whose capacity ranges from one to 3,000 farads and multi-cell modules ranging from 16 to 125 volts. Yutong's hybrid drive system incorporates Maxwell's 16 48-volt ultra capacitor modules.

These modules support braking energy recuperation and torque assist functions that enable hybrid transit buses to achieve fuel savings while reducing CO2 emission by approximately 25%. In comparison to conventional diesel buses, it also reduces particulate emissions by up to 90%.

These ultra capacitors store energy in an electric field. This electrostatic energy storage mechanism enables ultra capacitors to charge and discharge in fractions of a second, perform normally over a broad temperature range of -40 to +65 degrees Celsius, operate consistently through one million or more charge/discharge cycles and resist shock and vibration.

Ultra capacitors ability to charge and discharge rapidly enables them to efficiently capture regenerative braking energy and provide instant power for acceleration. Moreover, their long operational life and minimal maintenance requirements prove to be a very cost-effective energy storage solution for hybrid buses.

Currently, Maxwell ultra capacitors are powering approximately 4,000 hybrid transit buses that are in service worldwide, and are being employed in several other transportation applications including a stop-start idle elimination system developed by Continental AG for micro hybrid diesel automobiles, now being produced by PSA Peugeot Citroen in Europe.  

Maxwell Technologies’ top-line growth should be fueled by the expected increase in ultracapacitor sales through a production ramp-up for automotives, as well as its focus on improving its cost structure and the steady demand from heavy transportation, wind, braking recuperation and automotive programs.

In the near term, however, downside risks include the rate of penetration for ultracapacitor technology into broader markets, a higher cost structure for ultracapacitor production, R&D overheads and earnings dilutive equity issuances. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Headquartered in San Diego, California, Maxwell is a leading developer and manufacturer of innovative, cost-effective energy storage and power delivery solutions. Its ultracapacitor cells and multi-cell modules provide safe and reliable power solutions for applications in consumer and industrial electronics, transportation and telecommunications.

The company’s radiation-mitigated microelectronic products include power modules, memory modules and single board computers that incorporate powerful commercial silicon for superior performance and high reliability in aerospace applications. The company mainly competes with National Semiconductor Corporation (NSM) and Panasonic Corporation (PC - Snapshot Report).

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