Tesla has entered into a merger agreement with energy solutions provider Maxwell Technologies for a reported $218 million.
The company will be merged with a Tesla subsidiary and become a wholly owned subsidiary of Tesla.
According to Maxwell, Tesla will commence an all-stock exchange offer for all the issued and outstanding shares of the company.
The all-stock-deal is expected to be finalised in Q2, 2019.
"We are very excited with today's announcement that Tesla has agreed to acquire Maxwell. Tesla is a well-respected and world-class innovator that shares a common goal of building a more sustainable future," said Dr Franz Fink, president and CEO of Maxwell.
Fink added: "We believe this transaction is in the best interests of Maxwell stockholders and offers investors the opportunity to participate in Tesla's mission of accelerating the advent of sustainable transport and energy."
Commenting on the impending acquisition, Frost & Sullivan said that this is "one of the biggest game-changing news in the EV and energy storage industry".
Adding that: "This acquisition is expected to be a clear winning strategy for Tesla as it has certainly bought a company whose goals clearly aligns with its vision.
"Also, they acquire an experienced technical and manufacturing team in Maxwell, which is noticeably capable of making important advancements in the EV and storage industry."