Maxwell Technologies Inc. (MXWL) has been selected by Flextronics Automotive for supplying the energy storage module of a recuperation system. The recuperation system will be used by Flextronics Automotive to reduce fuel consumption and emissions in commercial vehicles.
Each energy storage module incorporates 16 3,000-farad ultracapacitor cells that have the capacity to store energy generated by a recuperative braking system, deliver stored electrical energy to power air conditioning, heating, lighting and other passenger comfort and safety features, and provide a reservoir of standby energy to stabilize the vehicle's electrical system.
The ultracapacitors store energy in an electric field. The electrostatic energy storage mechanism in the electric field enables ultracapacitors to charge and discharge very rapidly, perform normally over a broad temperature range, operate reliably through one million or more charge/discharge cycles and resist shock and vibration.
Flextronics Automotive, a leading global automotive supplier and a part of Flextronics, has designed the recuperation system to enable European commercial vehicle manufacturers to meet the European Union's stringent Euro 6 emission standards. Under the emission standards, it is mandatory to reduce nitrogen oxide, carbon monoxide, hydrocarbons, particulate matter and other pollutants produced by diesel engines significantly, beginning in 2014. Flextronics Automotive has also won a contract to produce recuperation systems for a major European commercial vehicle manufacturer that is planning to commence production of a new, low emission, vehicle model.
Maxwell’s top-line growth is expected to 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. Additionally, the ultracapacitors' high efficiency and long operational life make them a preferred energy storage solution for hybrid buses and other heavy, commercial and passenger vehicles.
In the near term, however, downside risks include a lower-than-expected 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. However, in the near term, we would advise investors to accumulate its short-term Zacks #1 Rank (Strong Buy rating) peers like Vishay Precision Group Inc. (VPG) and Polypore International Inc. (PPO).
Headquartered in San Diego,Maxwell Technologiesdevelops, manufactures and markets energy storage and power delivery products for transportation, industrial telecommunications and other applications and microelectronic products for space and satellite applications. Maxwell markets and sells its products in North America, Europe, and Asia.
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