European Automakers Begin to Adopt Maxwell’s Ultracapacitor Technology
The conference rooms are filled close to capacity today at the Roth Capital Partners’ annual conference for small-cap companies in Dana Point, which the Newport Beach, CA-based investment banking firm is calling its biggest conference in 23 years.
“The Japanese situation has tempered a bit of the enthusiasm today,” said Ted Roth, Roth Capital’s president, referring to the crises at Japan’s Fukushima nuclear power plant following the 9.0-magnitude earthquake and tsunami. “A lot of the companies are telling me that the first question they’re getting in their one-on-one interviews is whether they have been getting any of their components from Japan.”
Executives from more than 430 public companies, including more than 100 from China, are making presentations to an estimated 2,500 investors and analysts at the three-day conference, which continues through tomorrow.
In a presentation this morning, Maxwell Technologies (NASDAQ: MXWL) CEO David Schramm said the San Diego company is seeing “significant growth” in sales of its ultracapacitor energy storage devices, which discharge a nearly instantaneous spike of electrical power. Schramm says ultracapacitor sales increased 56 percent, to $68.5 million in 2010 compared to sales of $43.8 million in 2009.
Ultracapacitors also constitute more than half (56 percent) of Maxwell’s total revenue, which amounted to $121.9 million in 2010. The company also makes conventional high-voltage capacitors, which accounted for 29 percent of Maxwell’s revenue, as well as specialized microelectronics used aboard satellites and other spacecraft, which made up 15 percent.
It has taken more than a decade for Maxwell to develop its ultracapacitor business. As Schramm noted, the $68.5 million in ultracapacitor sales that Maxwell reported in 2010 was larger than the $53.7 million in total revenue that Maxwell reported in 2006. Much of those gains can be attributed to increased ultracapacitor sales in two key markets: wind turbines and automobiles.
Ultracapacitors are being used inside the hub of large-scale wind turbines to adjust the trim of turbine blades if wind gusts exceed the turbine’s operating parameters. Too much wind can damage the windmills, so adjusting the blades enables the turbine to spill excess wind—like luffing the sail of a sailboat. Schramm says Maxwell ultracapacitors are now operating in about 14,000 wind turbines, mostly in Asia and Europe.
In October, Maxwell also began delivering commercial-scale quantities of its ultracapacitors to Continental AG, which Schramm described as “a $30 billion, Tier 1 automotive components supplier in Europe,” comparable to Delco in the U.S. Continental is providing Maxwell’s ultracapacitors to PSA Peugeot Citroen of France for use in “stop-start idle-elimination” technology in two diesel-powered automobiles. The combined battery-ultracapacitor technology basically turns the motor off when a vehicle is stopped and restarts it as motorists accelerate.
Schramm says the technology can lead to a 15 percent improvement in urban-driving fuel economy, and reduces carbon dioxide emissions to comply with European Union mandates for pollution controls.
Schramm also describes the PSA Peugeot Citroen deal as a breakthrough for Maxwell, which has had little success in persuading U.S. automakers to adopt its ultracapacitor technology. When asked why the auto industry has been so slow to take up ultracapacitors, Schramm said, “It takes time because you’re putting new technology into very complex systems.”
But now that Continental AG has adopted the technology, Schramm says, “We fully expect to have more start-stop systems announced in the next year.”