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Chinese Firm Nabs Battery Maker A123 Out from Under JCI

National security issues could scuttle deal.

by on Dec.10, 2012

Now Chinese-owned, A123 will provide the batteries for the new Chevrolet Spark EV.

Mega-supplier Johnson Controls has withdrawn its bid for the bankrupt battery maker A123 Systems after declining to match a higher, $256.6 million bid submitted by the Chinese company Wanxiang Group Corp.

JCI originally appeared to have landed a deal to take control of the automotive portion of A123 – but the deal was scuttled in bankruptcy proceedings – though it leaves open some national security concerns. Meanwhile, Illinois-based Navitas Systems will buy A123’s government business, including all outstanding military contracts, for $2.25 million.

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A123 currently is the principal supplier of batteries for Fisker, which has seen its deliveries interrupted since the company filed for bankruptcy in October. The battery maker’s other clients include General Motors which will use an A123 pack in its new Chevrolet Spark EV electric vehicle.

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JCI Buys Bankrupt Battery Maker A123

Maker rejects Chinese rescue bid.

by on Oct.17, 2012

A123 fell victim to slow battery car demand - and manufacturing problems.

A123 Systems Inc., the Waltham, Massachusetts firm that had promised to revolutionize the car business with its batter technology, has filed for bankruptcy protection and announced it was selling all of its automotive assets to Johnson Controls Inc. for approximately $125 million.

That move came as the fast-faltering A123 elected to nix an alternative deal with a Shanghai-based battery company, Shanghai Advanced Traction Battery Co., which was supposed to ease A123′s cash flow crisis – but which also created a political stir considering the U.S. firm’s outstanding government loans.

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The sale to JCI, one of the auto industry’s largest suppliers, should permit the now bankrupt battery maker to maintain deliveries to an assortment of automakers that includes the California start-up Fisker Automotive.

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Chinese Cash Could Keep A123 Alive

But Wanxiang may eventual own 80% of U.S. battery maker.

by on Aug.08, 2012

A defect in the Fisker Karma battery pack was traced back to problems at the A123 production line.

Desperate for cash and struggling to restart its production lines after discovering a costly manufacturing defect, battery maker A123 has inked a tentative deal with a Chinese auto parts firm that could generate $450 million in much-needed cash.

But, in the end, the Wanxiang Group could end up with as much as 80% of Massachusetts-based A123, which currently provides batteries for the Fisker Karma and counts General Motors among the other automakers it has signed contracts with.

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The deal “will be beneficial” in a number of ways, said A123 CEO David Vieau, during a conference call to discuss the high-tech firm’s quarterly earnings and the Wanxiang deal. Most immediately, it will provide cash the American company desperately needs after some unexpectedly severe financial setbacks.  It will also help open up more markets for A123’s batteries, especially in China, and could improve economies of scale – translating into lower production costs, Vieau suggested.

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A123 Stock Soars on Word of Battery Breakthrough

Reversal of fortune for troubled battery maker?

by on Jun.13, 2012

A123's battery breakthrough could show up in future models like the Fisker Atlantic plug-in.

Investors will be watching closely to see how the increasingly troubled battery maker A123 Systems’ stock performs this morning.  Its shares surged 52% before the final market bell rang on Tuesday.

The company, which only recently acknowledged there was “substantial doubt” about its viability, may be in the midst of a significant reversal of fortune after revealing it has come up with a major breakthrough in battery technology.  That development should lower costs and make it easier to design and produce battery-electric vehicles while also expanding opportunities for battery technology in the telecommunications industry.

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The revised version of A123’s battery chemistry couldn’t come along at a better time.  The Massachusetts-based firm has faced a variety of problems in recent months, including the recall of batteries it produced for plug-in hybrid maker Fisker Automotive due to a manufacturing defect.

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A123 Recalling Faulty Electric Vehicle Batteries

Acknowledges blame for recent Fisker fiasco.

by on Mar.26, 2012

A123 has accepted responsibility for recent problems with the Fisker Karma battery pack.

Admitting it supplied the faulty pack that failed during a recent, highly publicized test of the Fisker Karma plug-in hybrid, battery maker A123 has announced the recall of lithium-ion batteries it has provided for five electric vehicle programs.

While the supplier declined to identify the other automakers impacted by the recall or the precise number of batteries, it indicated the total cost of replacing potentially defective batteries will come to $55 million.

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“This is absolutely not a good time” for the recall to occur, conceded David Vieau, CEO of A123 Systems, one of the largest providers of lithium-ion batteries for automotive applications – especially as it comes only a few months after a widely reported problem with the battery pack used in the Chevrolet Volt.  But Vieau insisted it is “not a widespread problem that would challenge the viability of the technology.”

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