A123 Systems Explained

A123 Systems, LLC.
Type:Private
Traded As:NASDAQ:
Founder:Yet-Ming Chiang, Bart Riley and Ric Fulop
Location City:Hangzhou, Zhejiang[1]
Location Country:China
Products:Electric vehicle batteries, batteries for various commercial products
Parent:Wanxiang Group
Num Employees:2000+

A123 Systems, LLC, a subsidiary of the Chinese Wanxiang Group Holdings, is a developer and manufacturer of lithium iron phosphate batteries and energy storage systems.

The company was founded in 2001 by Yet-Ming Chiang, Bart Riley, and Ric Fulop. By 2009, it had about 2,500 employees globally and was headquartered in Waltham, Massachusetts.[2] Its original product technology was based upon materials initially developed at the Massachusetts Institute of Technology.

History

In November 2005, the company announced a new, faster-recharging lithium-ion battery system[3] based on doped nanophosphate materials licensed from the Massachusetts Institute of Technology.

In December 2006, the United States Advanced Battery Consortium (USABC) in collaboration with the U.S. Department of Energy (DOE) awarded the company a US$15 million development contract to optimize A123 Systems' proprietary doped nano-phosphate battery technology for hybrid electric vehicle applications with a focus on power, abuse tolerance, durability and cost. USABC is an organization composed of Chrysler LLC, Ford Motor Company, and General Motors Corporation.[4]

BAE Systems announced that, from 2008, it would offer A123 Systems' lithium-ion battery technology as part of its HybriDrive Propulsion System used in the 2008 version of the Daimler Orion VII hybrid electric buses. As of September 7, 2009, more than 3,000 of the buses were in service.[5]

In May 2008, the United States Advanced Battery Consortium (USABC) in collaboration with the U.S. Department of Energy (DOE) awarded the company a US$12.5 million grant to develop its lithium-ion battery technology for plug-in hybrid electric vehicles.[6]

On March 5, 2008, General Electric, the company, and Think Global announced that the three firms had entered a partnership to enable global electrification of transportation. GE invested US$20 million in the company to help it roll out batteries for Think. The company and Think at the same time signed a commercial supply agreement. The partnership was announced at the 78th annual international Motor Show in Geneva.[7] After over $10 million in investment in the Think Global Think City, A123 ceased production of its L20 battery pack for Think after a single day of production in December, 2008.

In January 2009, A123 systems applied to the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program (ATVMLP) for US$1.84 billion in direct loans to support the construction of new lithium-ion battery manufacturing facilities in the United States, locating the first plant in southeast Michigan near Detroit.[8] The application was still pending as of early 2012, the company estimated that it might be allowed to borrow up to US$233 million from the program.[9]

In April 2009, Chrysler Corp. announced a contract with A123 to supply batteries for their ENVI EV vehicles.[10]

In August 2009, the company received a US$249 million grant from the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program (ATVMLP) to build production facilities in Romulus and Livonia, Mich.[11] after it received a US$125 million in tax credits and incentives from the Michigan Economic Development Corporation in spring and a US$10 million grant from the state in fall 2008.[12]

In September 2009, the company raised US$380 million after going public on the NASDAQ stock exchange.[13]

In 2009, the company was included on the Guardian's "Global Cleantech 100" list.[2] Later, A123 was selected to Technology Review Magazine's list of the 50 Most Innovative Companies 2011.[14]

Chrysler's ENVI division was disbanded by Nov 2009.[15]

In December 2009, the company formed a joint venture with Shanghai Automotive Industry Corporation (SAIC), the largest automaker in China. This was the first joint venture between a Chinese automaker and a non-Chinese battery supplier. The new venture is called Advanced Traction Battery Systems (ATBS).[16]

In August 2010, A123's co-founder Professor Yet-Ming Chiang spun off a new company from A123 named 24M Technologies, which makes technology that combines concepts in current lithium-ion batteries with flow batteries, where tanks of liquid electrolytes combine to create an electric current.[17]

In 2010, A123 received a US$249 million grant from the U.S. Department of Energy for building battery production facilities. Approximately $129 million of the grant was used to build a 550 MWh battery plant in Livonia and another in Romulus.[18] An untapped $120 million grant was abandoned by A123 by May 2012.[19]

From its founding in 2002 through 2011 A123 raised over $1B in private equity, public finance and government funding.

In September 2010, the company opened the largest lithium-ion battery manufacturing facility in North America in Livonia, Michigan. When fully operational, the factory is expected to be capable of producing battery packs for the equivalent of up to 30,000 electric cars per year.[20]

In March 2011, the company received its third contract from the United States Advanced Battery Consortium (USABC) in collaboration with the U.S. Department of Energy (DOE): a US$8 million advanced battery development contract to continue developing its Nanophosphate® lithium ion battery systems to meet USABC's target application for a Power-Assist Hybrid Electric Vehicle (PAHEV) Low-Energy Energy Storage System (LEESS).[21]

The company laid off 125 workers in December 2011 as forecasted demand for its batteries did not materialize. The company had 60 customers with a combined projected demand for the equivalent of 100,000 plug in hybrid battery packs and factory capacity for up to 30,000 such packs and facilities capable of expansion to meet the demand. Fisker projected 15,000 unit demand in its first production year but only ordered 1500. GM, SAIC, and BMW all fell significantly below projected demand as the EV market developed much slower than anticipated. Simultaneously the US government pulled back on loans to developing clients forcing a series of bankruptcies in the emerging marketplace. Fisker, A123's top client, had its Government loan pulled and it received only $196M of the originally committed $500M loan. A123 had to issue a battery recall for all batteries in a car developed by Fisker.[22] A123 Systems had more than 3000 employees as of December 2012.

Investments

In 2010 the company invested in Fisker Automotive's Karma with Ace Investments and Kleiner, Perkins, Caufield & Byers.[23]

The company formed a joint venture with SAIC Motor to manufacture its batteries in China in early 2010.[24]

In February 2018, A123 announced an investment in Ionic Materials' solid-state battery technology. Ionic is developing a unique polymer electrolyte that claims new levels of safety and performance in advanced batteries.[25]

Product recall

In early 2012, the company announced the replacement of defective battery packs and modules supplied to about five customers, including Fisker Automotive. The defect caused a Fisker Karma to shut down in a Consumer Reports test. It estimated the recall would cost about US$55 million. Fisker reduced its purchase order of battery from the company to lower its inventory. Cylindrical cells made in China that are used by BMW and others were declared as not affected.[9]

Wanxiang acquisition and bankruptcy

In August 2012, Chinese automotive components manufacturer Wanxiang Group agreed to invest up to $465 million to acquire as much as 80% of A123 Systems;[26] but the acquisition was not completed before A123 filed for bankruptcy.

In early October 2012, the A123 Systems' stock was trading for 27 cents per share, down from a 52-week high of $4.44 per share about a year beforehand.[27]

On October 16, 2012, A123 filed for bankruptcy protection under Chapter 11. On January 28, 2013, Wanxiang America purchased the preponderance of A123's assets out of bankruptcy for $256.6M and organized A123Systems, LLC.[18] [28]

An earlier statement, released by A123 Systems in early October, said that it had entered an asset purchase agreement with Johnson Controls, with the stipulation that the company's bid must be approved by a US bankruptcy court and could be topped by a rival bidder.[29] Johnson did not win the bankruptcy auction and withdrew its bid in early December.[30]

On October 16, 2012, A123 filed for bankruptcy protection under Chapter 11. The filing listed assets of $459.8 million and liabilities of $376 million.[31] [32] The company also stated that its automotive assets would be purchased by Johnson Controls, a supplier to A123, for $125 million.[33] On January 28, 2013, Wanxiang America purchased the preponderance of A123's assets out of bankruptcy for $256.6M and created A123Systems, LLC.[18] [28] The government business was sold to US firm Navitas Systems for $2.25m.[34]

Lithium Werks sale

In March 2018, the US battery manufacturer Lithium Werks announced it took over the Chinese factory of A123 Systems in Changzhou, plus the workforce and clients base in China, Europe and the United States. After the merger the Texas-based company owns factories in China and offices in the US, the Netherlands, Northern Ireland, the UK and Norway.[35] Lithiumwerks continued the production of the 'nanophosphate' battery range, renaming the cells from 'A123' to 'Lithiumwerks' by the end of 2019.[36]

Following the sale of their factory, A123 said it wanted to concentrate on the automobile market.[35]

Products

Transportation

Passenger vehicles
Commercial truck, bus, and off-highway
Racing

Electric grid

Small applications

Black & Decker and DeWalt power tool lines were early adopters of A123 cells.

Cells

A123 had LiFePO4 Cells in the form 18650, 26650 and Pouch Cells with 14 and 20 Ah. The company EVLithium reports that A123 has additional Pouch cells: A123 38AH NMC Lithium ion Pouch Battery and A123 LiFePO4 Battery 50AH[58]

See also

Notes and References

  1. Web site: A123 Locations A123 Systems . A123 Systems . https://web.archive.org/web/20200216110538/http://www.a123systems.com/about/locations/ . 2020-02-16.
  2. https://www.theguardian.com/globalcleantech100/profiles-1-10 Global Cleantech 100
  3. Web site: EV World "A123Systems Introduces New Generation Lithium-Ion Battery" . Evworld.com . April 1, 2012 . dead. https://web.archive.org/web/20120308045910/http://www.evworld.com/news.cfm?newsid=10016 . March 8, 2012 . mdy .
  4. Web site: USABC Awards $15 Million Battery Technology Development Contract to A123Systems. December 8, 2006. February 9, 2007. https://web.archive.org/web/20070209160445/http://www.uscar.org/guest/article_view.php?articles_id=39. dead.
  5. 3,000 Hybrid Buses: Daimler Buses North America Reaches Sales Milestone. September 2, 2009. Oriskany, New York and Mississauga, Ontario. Daimler Buses North America. September 12, 2016.
  6. Web site: USABC AWARDS $12.5 MILLION BATTERY TECHNOLOGY DEVELOPMENT CONTRACT TO A123SYSTEMS. May 5, 2008. https://web.archive.org/web/20080511101146/http://www.uscar.org/guest/article_view.php?articles_id=210. May 11, 2008 . live.
  7. http://www.a123systems.com/news/111 A123 Systems press release
  8. Web site: Renewable Energy News, Jobs, Events, Companies, and more . Renewable Energy World . April 1, 2012.
  9. News: A123 Replacing Batteries That Led to Fisker Karma Shutdown . Mar 26, 2012 . Craig Trudell and Alan Ohnsman . BusinessWeek . dead. https://web.archive.org/web/20120430115243/http://www.businessweek.com/news/2012-03-26/a123-replacing-defective-batteries-that-led-to-fisker-shutdown . April 30, 2012 . mdy .
  10. Web site: Jeremy Korzeniewski . Chrysler to use A123 cells in its electric vehicles . Autobloggreen.com . April 1, 2012.
  11. Web site: President Obama Announces $2.4 Billion in Grants to Accelerate the Manufacturing and Deployment of the Next Generation of U.S. Batteries and Electric Vehicles . August 5, 2009 . . . 5 August 2009 . mdy-all .
  12. News: Analysis: A123 Systems layoffs highlight challenges for Michigan's budding battery industry . Dec 2, 2011 . Nathan Bomey . Ann Arbor.com .
  13. News: AONE IPO charges car battery market . CNN . Steve . Hargreaves . September 24, 2009.
  14. Web site: The 50 Most Innovative Companies 2011. Technology Review . October 16, 2012.
  15. News: Chrysler dismantles electric car plans under Fiat . Nov 6, 2009 . Kevin Krolicki . Reuters .
  16. News: A123 Systems, SAIC to set up China car battery JV. Reuters. December 17, 2009. Poornima. Gupta. December 18, 2009.
  17. Web site: LaMonica. Martin. A123 spinoff 24M funded for novel energy storage. August 15, 2010. https://web.archive.org/web/20100824133949/http://news.cnet.com/8301-11128_3-20013609-54.html. August 24, 2010 . live.
  18. News: Chinese Creating New Auto Niche Within Detroit . New York Times . May 14, 2013 . Vlasic, Bill . A1.
  19. News: A123 First Quarter 2012 Earnings. May 15, 2012. A123 Systems.
  20. Web site: U.S. Li-ion battery production ramping up. Automotive Engineering International. September 16, 2010. https://web.archive.org/web/20130514183901/http://www.sae.org/mags/aei/8863. May 14, 2013. dead. mdy-all.
  21. Web site: USABC AWARDS $8 MILLION ADVANCED BATTERY TECHNOLOGY CONTRACT TO A123 SYSTEMS. March 23, 2011. https://web.archive.org/web/20110430215357/http://www.uscar.org/guest/news/493/Press-Release-USABC-AWARDS-8-MILLION-ADVANCED-BATTERY-TECHNOLOGY-CONTRACT-TO-A123-SYSTEMS. April 30, 2011 . live.
  22. News: A123 Systems lays off 125 workers at Michigan battery plants . Nov 26, 2011 . Nathan Bomey . Ann Arbor.com .
  23. Web site: $ 115 million private funding hastens Fisker Karma's development. January 18, 2010 . September 12, 2016. https://web.archive.org/web/20100808020811/http://www.ecoseed.org/en/general-green-news/green-business-news/green-business-news/5904. August 8, 2010.
  24. Web site: A123 Systems and Shanghai Automotive form battery JV. Sam . Abuelsamid . December 21, 2009. September 12, 2016.
  25. News: Spagnuolo. Paulette. A123 Systems Invests in Ionic Materials for Solid-State Battery Development. 28 February 2018. Nasdaq Global Newswire. 13 February 2018.
  26. Web site: A123 Systems and Wanxiang Group Corporation Execute Definitive Agreements for Wanxiang's Strategic Investment in A123 . A123systems.com . August 16, 2012 . 2012-10-17 . https://web.archive.org/web/20121018130555/http://www.a123systems.com/12824480-de55-4032-9351-6f7955a5a36e/media-room-2012-press-releases-detail.htm . October 18, 2012 . dead. mdy-all .
  27. Web site: Bomey . Nathan . Chinese firm positioned to acquire U.S.-funded battery maker A123 Systems . Detroit Free Press . October 7, 2012 . 2012-10-17.
  28. News: Wanxiang Gets Final Approval to Buy A123 Systems. https://web.archive.org/web/20130131031501/http://www.reuters.com/finance/stocks/AONEQ.PK/key-developments/article/2682498 . dead . January 31, 2013 . Reuters . Eric . Loveday . January 31, 2013. February 8, 2013.
  29. News: Grevatt. Jon. Wanxiang looks to courts over A123 Systems acquisitions. Jane's Defence Weekly. 2012-10-24.
  30. News: China's Wanxiang wins auction for A123. 31 January 2013. CNN Money. 10 December 2012.
  31. Web site: Battery maker A123 Systems files for bankruptcy . Reuters . October 16, 2012 . 2012-10-17 . dead. https://web.archive.org/web/20121019050136/http://news.yahoo.com/battery-maker-a123-systems-files-bankruptcy-140217965.html . October 19, 2012 . mdy .
  32. News: Car battery maker A123 files for bankruptcy . CNN . and Emily Fox . Aaron Smith . October 16, 2012 . October 16, 2012.
  33. News: Battery builder A123 Systems that won $249 million federal grant files for bankruptcy. Yahoo Motormatic . Justin . Hyde . October 16, 2012 . October 16, 2012.
  34. News: China's Wanxiang wins approval to buy US battery maker . BBC . Jan 30, 2013.
  35. https://www.electrive.com/2018/03/29/a123-sells-off-battery-factory-to-lithium-werks/ electrive.com: A123 sells off battery factory to Lithium Werks
  36. Web site: Lithium Werks (Former A123 systems) ANR26650M1-B 2500mAh - 50A LifePo4 - 3.2V - 26650 - LiFePO4 - Rechargeable batteries | NKON.
  37. Web site: In Tokyo, taxis are going electric too. Claire M. . Umali. April 29, 2010 . 12 September 2016.
  38. News: Motavalli. Jim. A123 Batteries Slated for Chinese Electric Car. The New York Times "Wheels" blog. The New York Times Company. November 9, 2010.
  39. News: Chevrolet to Sell Purely Electric Spark Hatchback in U.S. . Jonathan Schultz. The New York Times. 2011-10-12. October 12, 2011.
  40. Web site: Chevrolet to produce Spark battery electric vehicle for US and global markets starting in 2013 with A123 Systems pack; EN-V gets a Chevrolet badge. Green Car Congress. October 12, 2011. October 12, 2011.
  41. Web site: 12-volt battery gets a makeover as automakers shift to more electric parts. Automotive News. 9 May 2011. May 10, 2011.
  42. Web site: R&D Magazine 2011 R&D 100 Winners. June 22, 2011.
  43. Web site: A123 Systems to supply battery modules to Smith Electric Vehicles for electric trucks. Green Car Congress.
  44. Web site: ALTe SIGNS LONG-TERM SUPPLY AGREEMENT WITH A123 SYSTEMS FOR ADVANCED LITHIUM ION BATTERY PACKS.
  45. Web site: McLaren Snags First F1 KERS Win; Custom A123Systems Cells with More Than 20,000 W/kg . July 27, 2009.
  46. Web site: The KillaCycle – New World Motorcycle Speed Record. 12 September 2016.
  47. Web site: Ohio State's Buckeye Bullet Smashes World Record For Fastest Electric Car. 27 August 2010.
  48. Web site: Mavizen is proud to announce a supply and distribution agreement with A123 Systems by which Mavizen will offer A123's advanced Nanophosphate® lithium ion battery technology for two-wheeled high-performance motorsports applications. . Mavizen.com . May 1, 2011 . dead. https://web.archive.org/web/20111009063402/http://www.mavizen.com/LATEST_NEWS_/A123_partnership.html . October 9, 2011 . mdy .
  49. Web site: Electric Car Breaks 200 MPH, Sets New World Land Speed Record . HuffPost. 19 September 2014.
  50. Web site: A123 Systems Gets on the Grid. Earth2Tech.com. GigaOM. November 21, 2008.
  51. Web site: AES Installs A123 Energy Storage System in Chile . SustainableBusiness.com . November 11, 2009 . dead. https://web.archive.org/web/20091231144112/http://www.sustainablebusiness.com/index.cfm/go/news.display/id/19300 . December 31, 2009 .
  52. Web site: AES Completes $17M DoE Loan on Energy Storage Project. Energy Storage Trends. 24 December 2010. December 24, 2010.
  53. Web site: A123 supplies giant battery for 'hybrid power plant'. CNET.com. February 7, 2011.
  54. News: A123 Systems Hooks Into China's Grid. The New York Times Company. July 26, 2011. Katie. Fehrenbacher. July 26, 2011.
  55. Web site: China's wind power has faulty connection. Asia Times. June 16, 2010. http://webarchive.loc.gov/all/20101008154828/http://www.atimes.com/atimes/China_Business/LF16Cb03.html. October 8, 2010 . unfit.
  56. News: The World's Largest Lithium-Ion Battery Farm Comes Online. Forbes. October 27, 2011. Ucilia. Wang. October 27, 2011.
  57. News: St. John. Jeff. NEC Buys A123 Energy Storage Biz From Wanxiang. February 28, 2018. Greentech Media. March 24, 2014.
  58. Web site: August 2, 2023. A123 Battery . Evlithium.

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