A123 Battery Maker Files Bankruptcy-----Carl Schwab

Electric-car-battery manufacturer A123 Systems Inc. filed Chapter 11 bankruptcy October 16, 2012. The reason for the BLOG is that the writer is a little bit acquainted with A123 and understands how un-intended consequences have set in. The writer has used Li-Fe type cells from A123 for hobby purposes for several years in preference to either Li-ion or Li-po. Reason being that the A123 cells are tougher and can take more accidental abuse than either the Li-ion or Li-po and won’t burst into flames. This small market in the RC hobbies came about because A123 produced a 2.3 Ahr cylinder cell that functions quite well in power hand-tools. The above has taken place over the last 6-10 years. After getting itself established in the handtool market, A123 attempted to penetrate the EV or E-car battery pack field.

Not long ago, A123 Systems Inc. was seen as a rising technology company that was going to help revolutionize the auto industry and put thousands of Americans into EV. After the hype was settled down, the Waltham, Mass., company was tripped up by slower-than-expected advances in battery technology. Further stubbornly higher costs of the other parts of the EV and customer worries of just running out of juice and being stranded contributed to delay.

Three years ago the Obama administration set a goal of getting one million electric and plug-in vehicles on the road by 2015. But the target was wildly unrealistic. In the first 9 months of 2012, Nissan sold just 9600 Leaf and General Motors has sold only 7671 total of the VOLTS. Way off the mark. One question is the approximately 100 mile range per charge. This is satisfactory for a second car driven daily BUT not so for a trip car until a fast-recharge scheme proves practical and widely available. Another part of the Obama administration meddling was to connect an EV manufacturer, in this case Fisker and in particular their Karma model in a grand scheme wherein A123 would manufacturer the packs and Fisker would install. Because of technical difficulties that had to be solved schedule got screwed up and cash flow became a huge headache. Hence A123 could not pay the interest on the loans almost forced upon both they and Fisker and bankruptcy was necessary. Johnson Controls, a much older and more substantial company in the automobile industry has agreed to buy from A123 the un-needed manufacturing capability and agree to operate it to keep Fisker and other potential customers supplied with the A123 packs. In arriving at this arrangement the Chinese battery manufacturers will not gain access to A123 technical expertise. At its reduced size A123 will be able to continue refining the product solving necessary technical problems to assure reliable packs for Fisker and others. This is a good thing.

So that appears how things stand. A123 is working on solving technical problems that they are well qualified to do while Johnson Controls (with its financial strength) has the muscle to maintain the production momentum without needing financial support i.e. the Obama largesse is NOT needed and Johnson Controls, since it is their buck, sets schedule—NOT some political operative.

INTERESTING----

Comments

[Pirkko Alho]

That was really a bad news.Well battery in people life is really important and it is good if they develop it in that business.In Finland country many are tested most of their batteries and one of the fact is most of the batteries are long lasting even they are rechargeable.

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