US electric car battery maker A123 files for bankruptcy

Posted at October 21, 2012 » By : » Categories : News » Comments Off on US electric car battery maker A123 files for bankruptcy

US electric car battery maker A123 Systems has filed for bankruptcy after failing to make an interest payment.

The company was founded in 2001 as a spinoff to commercialise lithium-ion battery technology developed at Massachusetts Institute of Technology.

A123 Systems floated in 2009 and invested in a lithium-ion battery plant in Michigan, supported in part by a $249 million grant from the US Department of Energy’s loan programme, which also poured money into now-defunct solar panel manufacturer Solyndra.

The company’s advanced lithium-ion batteries have found they way into General Motor’s Chevy Spark, hybrid buses and had been lined up for use in future GM and Chrysler vehicles.

But over the last few years, the company has been plagued by successive quarterly losses and a $65 million class action suit related to the recall of Fisker Automotive’s batteries.

Over the summer, the company looked like it might be saved by a $450 million investment from Chinese carmaker Wanxiang Group Corporation but A123 decided it was not possible to continue with the deal.

“We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion,” explained CEO David Vieau in a statement.

Now Johnson Controls will buy the company’s automotive assets, which Vieau says will be in the “best interests of A123 and its stakeholders at this time”.

The $125 million deal will cover all of A123’s automotive assets, including its battery technologies, contracts with Fisker Automotive and GM, and facilities in Michigan and China.

“Our interest in A123 Systems is consistent with our long-term growth strategies and overall commitment to the development of the advanced battery industry,” said Alex Molinaroli, president of Johnson Controls Power Solutions in a statement. “We believe that A123’s automotive capabilities are a good complement to our existing portfolio.”

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Related stories:
Toyota scales back all-electric plans to focus on hybrids (26-Sept)
UK low emission vehicle sales start to accelerate (14-Sept)
Ford brings electric vehicle development in-house (16-Aug)
US battery-maker recharged by Chinese investor (14-Aug)

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