Dixie Electric car, a subsidiary of General Electric, is getting a new lease on life.
The company announced Wednesday that it has raised $7 billion from Accel Partners, and that it plans to spend $10 billion to build and sell its first electric vehicle.
The move by the Silicon Valley startup comes as investors seek a new vehicle to compete with Tesla’s Model 3, which has been a top-tier product.
Accel also owns the energy-storage provider San Mateo Energy, and is developing batteries for the California Highway Patrol.
Dixie has been working on the batteries since last fall, when it purchased batteries from a subsidiary, SGI, to sell to Tesla.
The deal for the battery business was the biggest in Dixie’s history.
The electric vehicle market is estimated to reach $3 trillion in sales by 2020, according to research firm IHS Automotive.
The startup is investing heavily to bring the batteries to market, which will allow it to charge electric vehicles from batteries that it’s developing.
The batteries also have to withstand harsh environments, and have to be durable enough to last the life of the battery.
It has also been testing batteries for vehicles in California, where Dixie operates a charging station.
Tesla’s market share is down a bit from the year before, according the firm.
DirecTV, a division of Time Warner, said Wednesday that the price of its DirecTV Now streaming service jumped 4% on Wednesday after a dip of 6% a year ago.
Time Warner said it also expects to grow its business in the next year or so as consumers get more information about its streaming service.
It will be hard for the streaming service to catch up to the premium video service Direc.
That could be the reason for Dixie to make a bet on its new venture.
The battery company’s batteries, which are currently used in the Tesla Model 3 and Chevy Volt, are expected to cost between $5,000 and $6,000 each, according a presentation from the Palo Alto, Calif., firm.
That’s a lot less than the $100,000 that analysts at the investment bank Piper Jaffray are pricing the battery company for.
The price of the new batteries will likely increase as the company sells more of its batteries.
In addition, the company will be able to sell the batteries at much lower prices, since the battery prices are not driven by the price per kilowatt-hour, according Accel.
Dixy is also developing batteries that can store electricity, and the batteries are more energy efficient than traditional batteries.
DIXY CEO Adam B. Raskin said Wednesday the company is taking a “risk-averse approach.”
Dixies battery is capable of storing up to 1,500 kilowatts of electricity.
But the batteries can only store 1,000 kilowats in a battery, and up to 300 kilowatthours are needed to charge the electric vehicle, said Raskins presentation.
Daughters battery also has a smaller energy density, which makes it ideal for use in the charging station, said a presentation by Dixys executive vice president and general manager of marketing and business development, Michael J. Cavanagh.
Ditchys batteries are also more durable than traditional lithium ion batteries, making them easier to handle in a crash, said the presentation.
In 2018, Dixyns battery was sold for $4.6 million, according its earnings call with investors.