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Premium EV Battery Maker A123 Systems Files for Bankruptcy


A123 Systems Tech Assembling a Battery - Better TimesIn a press release yesterday, A123 Systems, an advanced lithium-ion [Li-ion] electric vehicle [EV] battery manufacturer, announced what investors and owners feared and expected, bankruptcy. Since its IPO in 2009, A123 Systems initially attracted a lot of investors to its new, high-energy battery technology, driving the stock price up to a high of $25.77 per share. Three years later, it had fallen to just 82¢.

A123 Systems was founded in 2001 to manufacture and market an advanced Li-ion technology developed by MIT professor and scientist, Yet Ming Chang. While it signed multiple supply contracts with automakers such as Fisker Automotive and Chevrolet, it may have relied too heavily on Fisker, and when Fisker failed to roll out the Karma on time, they had to stop production. A later Fisker battery recall may have sealed A123’s fate.

Unfortunately, in any emerging market segment, there are bound to be setbacks, and A123 Systems‘ relationship with Fisker wasn’t the only problem. In addition to Fisker and Chevy problems, the economy is flagging, EVs still haven’t hit the mainstream, as well as others, and the combination of all these problems have proven to be too much for A123 to bear., and in spite of A123 Systems’ industry-leading Li-ion battery technology, the demand just hasn’t been there.

In a statement issued just after A123’s press release, Plug In America‘s legislative director, Jay Friedland, said, “Our country is experiencing tremendous success as we electrify transportation. Johnson Controls, Envia, Saft, GM, and LG Chem are making great strides in driving down battery costs while creating a US-based sector for battery technology. Government can help facilitate innovation, but the natural business cycle remains – some failures in any emerging industry are inevitable.”

A123 Systems has started proceedings for Chapter 11 Bankruptcy and has entered into an asset buyout agreement with competitor Johnson Controls, who will take possession of A123 Systems’ assets in Michigan and China. A123 Systems will still retain licensing for some of its technologies.

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