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Maxwell to Supply Ultracapacitors for General Motors Cars

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Maxwell Technologies, Inc.’s (MXWL - Free Report) shares surged 18% to $6.03 yesterday after the company announced that General Motors Company (GM - Free Report) will use ultracapacitors of the former in its cars.

Continental Automotive Systems, a General Motor electronic parts supplier, will integrate Maxwell’s ultracapacitor technology with its own voltage stabilization system (“VSS”) to be used in 2016 Cadillac ATS and CTS sedans and ATS coupes, excluding the ATS-V, CTS-V and CT6 models.

According to Maxwell, General Motors is the first North American automotive original equipment manufacturer (“OEM”) to use ultracapacitors as part of an enhanced start-stop system, which will reduce fuel costs, improve performance and decrease emissions.

Maxwell’s ultracapacitor technology shuts off the engine whenever the vehicle stops and restarts seamlessly as the driver accelerates. The start-stop system provides burst power needed to restart the engine, which reduces high currents and frequent cycling, thus ensuring better battery life.

These ultracapacitors also provide additional power for stabilizing the vehicle's electrical system during periods of high power demand.

Batteries produce and store energy generated by a chemical reaction but ultracapacitors store energy in an electric field. This electrostatic energy storage mechanism facilitates ultracapacitors to charge and discharge instantly, function normally over a wide-ranging temperature, and resist shock and vibration.

According to the CEO of Maxwell, the decision of General Motors to use Maxwell-powered VSS proves the ultracapacitor’s applicability in various applications. This appears promising for future growth at the company as the automotive industry continues to focus on improved vehicle electrification.

At present, more than 1 million cars on the road use ultracapacitors, with more on the way.

Zacks Rank

Maxwell Technologies currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in elec-misc components sector are Mobileye N.V. and Active Power Inc. . While Mobileye sports a Zacks Rank #1 (Strong Buy), Active Power carries a Zacks Rank #2 (Buy).

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