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A123 Systems to invest additional $200+ M to double Li-ion manufacturing capacity; current facilities running at full utilization

A123 Systems LLC, a developer and manufacturer of advanced lithium-ion batteries and systems, plans to double global manufacturing capacity to 1.5 GWh within the next 3 years. The company operates manufacturing hubs in the state of Michigan; Hangzhou, China; and Changzhou, China. All three are now operating at capacity due to considerable growth in demand.

While the company is currently in the midst of a $100-million capital expansion across its manufacturing network, A123 has recognized that the existing investment plan must be substantially expanded to satisfy much stronger market demand for its products. The company currently forecasts growth of more than 50% this year. The new investment program of an additional $200+ Million will be installed in phases over the next three years, with additional investments anticipated as target markets further develop.

The additional capacity is planned to support a variety of applications and new customer programs across the globe including low voltage hybrids, plug-in passenger vehicles and several commercial vehicle programs.

These programs collectively draw upon A123’s expanding product portfolio which offers multiple lithium-ion chemistries and cell designs optimized for different applications. While A123 currently sees broad demand across its target markets, key new business wins have also validated the company’s strategy.

In the field of low voltage hybrids, not only is the 12V starter battery product line (earlier post) continuing to expand but A123 has also received multiple production awards for 48V micro-hybrid applications.

In China, the company is quickly capitalizing on the growth of plug-in vehicles in both the passenger vehicle and bus segments. These successes are driving additional R&D in high energy and power cell designs which will enter the market in the coming years.

Comments

kelly

US MIT made it. US tax dollars financed it. China got it[cheap].

electric-car-insider.com

Timing is everything. And financial discipline, apparently. The first iteration of A123 spent money like it would never end, and that orders would come in right on time according to projections.

Fortunate that the technology found a good home, where savvy and thrifty managers will take better care of it.

SJC

A123 had quality problems, if the Chinese do the same the results could be similar.

Brotherkenny4

The A123 technology was unfairly favored early on because it was intrinsically safer than other li-ion batteries with higher energy cathodes. There was a lot of fear that batteries would blow up, and there are still those fear mongers out there. However, the A123 tech was somewhat lower in energy and the higher energy cathode materials were found to be not nearly as dangerous as the fear mongers would have us believe. The A123 tech does have some real advantages in range of operating temperature and it can be very high current, which makes it a good fit for many applications. It may not be the perfect fit for a 200 mile EVs, but it can be a part of the general electrification of vehicles. It appears that the Chinese understand that. The US investors only heard the hype or the fear mongering and are generally lacking in vision and have a disdain for investments that require a market to develop. US tax dollars were not meant to make companies rich, but to create jobs for working people in the US. Regardless of whether A123 is US owned or Chinese owned (no owner of a company is a patriot because they only work for the money and are legally required to) jobs were created and apparently there will be even more jobs growth in the US because of further Chinese investments associated with the burgeoning nature of this industry that has been supported by US tax dollars. So, do we care if the US investors were not savvy enough to take advantage of this market, or do we just care that there are more jobs out there for working class people in the US?

Kelly: US investors could have gotten A123 cheap also, but they just didn't see it. Blindness to reality can result from a life of privilege and wealth where "Yes men" and followers abound. If all one ever hears is the groveling of the infantilized hoards then it is easy to be mislead about ones own prowess. It happens in all big companies and institutions where the leaders hear only the agreement from panderers and not the critically thinking voices.

HarveyD

Had the US government been smarter, it would be getting $$$M in royalties from the new A123 owners, regardless of where they are located.

R & D Support and subsidies are essential to accelerate development and production of new technologies but applications must be changed to receive partial and/or full pay backs from royalties for 20+ years.

SJC

That would be investing, the Republicans don't want the government investing in business. They want the private sector to pick the winners and losers, or just ignore them entirely because they may not be massively profitable.

JMartin

Yes, the Republicans don't want the government investing, but they are happy to let industry profit from basic research that government paid for. Democrats, on the other hand, want government to pay for it all and then give it away.

D

Democrat Republican both cats with slightly different stripes. Batteries are great but so far have not lead to the price savings and cost reductions from reducing system complexity they were promised to do. Useful EV's are still rich mens toys. It seems a lot of this tech should still be in the lab since a simple diesel motor gets better mileage than a hybrid car and deliver a cheaper car to market. You can also drive them across the country.
A decade of billions in throw away cash and the electric has not lived up to anyone's expectations. Current micro electric car about 25K and goes OK if it doesn't get too cold.

SJC

My last comment was removed.

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