A123 Battery Supplier Keeps On Keepin’ On, But For How Long?

By Jason Davis | June 12, 2012
Battery supplier A123 Systems Inc. is not dead. Not yet, at least. The plucky underdog in the electric vehicle battery business is holding its head high, hoping that its latest breakthrough in battery technology can lead to a rebound. The new tech will allow consistent battery performance in extreme temperatures and will “eliminate weight, cost, and technical complexity,” said David Vieau, A123's chief executive officer, speaking to Automotive News. The problem for A123 though, is volume and cost. In order to compete with the big dogs from Panasonic’s Sanyo Electronics, LG Chem. LTD, Hitachi, and Samsung, A123 will need to ramp up production efficiency to be competitive in manufacturing. At the moment the US-based company, which secured $249 million in federal grants in 2009, is “far from competitive in that regard.
Last week, we reported that A123 is facing substantial doubt about its future viability in an underwhelming electric vehicle market following a dismal and expensive recall for Fisker Automotive’s Karma luxury sedan. Even the SEC commented: “There is no assurance that the company will be able to obtain such financing on favorable terms, if at all, or to successfully further reduce costs in such a way that would continue to allow the company to operate its business.” A123’s current clientele include BMW AG, Daimler AG, Volvo AB, and China’s SAIC Motor Corp, in addition to Fisker, which last week told its entire customer base NOT TO DRIVE ITS CARS. As a result of poor factory conditions, A123 has revamped its factory procedures and made significant personnel changes while assuring its customers it is confident in its fixes and future batteries. As for the new battery technology, Ohio State University’s Center for Automotive Research has validated A123’s performance claim. Those batteries should arrive in new cars sometime next year, presumably with the power to restore the manufacturer’s business. Source: Automotive News