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Two separate deals announced this week will bring two U.S.-based electric vehicle battery manufacturers closer to China market, which likely will represent one of the EV industry's largest domestic markets.
A new memorandum of understanding between A123 Systems of Waltham, Mass., and China's largest automotive components supplier Wanxiang Group Corporation, could bring up to $450 million in new investment to the troubled company.
A123 supplies batteries to Fisker Automotive and GM’s Spark electric cars with battery like Toshiba PA3451U-1BRS Battery , Toshiba PA3457U-1BRS Battery , Toshiba PA3634U-1BAS Battery , Toshiba PA3692U-1BRS Battery , Toshiba PA3692U-1BAS Battery , Toshiba Tecra R10 Battery , Toshiba PA3357-1BRL Battery , Toshiba PA3509U-1BRM Battery , Toshiba PA3635U-1BAM Battery , Toshiba PA3636U-1BRL Battery , Toshiba PA3728U-1BRS Battery , Toshiba PA3817U-1BRS Battery , and it has been struggling to keep manufacturing costs down amid slow electric vehicle sales and an embarassing recall. Indeed, even as A123 announced the new deal, it revealed losses of $82.9 million for its second quarter. Second-quarter revenue was just $17 million, off 53 percent from the year-earlier period.
"Today's announcement is the first step toward solidifying a strategic agreement that we believe would remove the uncertainty regarding A123's financial situation," said A123 Sytems CEO David Vieau. "A substantial capital investment from Wanxiang would not only provide financial stability to A123 as we continue to grow, but it would also align us with a large successful global brand in the automotive and cleantech industries."
Wanxiang is one of China's largest privately owned companies, with more than $13 billion in revenue.
A123 Systems recently announced new breakthrough technology called Nanophosphate EXT that improves the capacity and capability of its electric vehicle batteries in extreme temperature conditions. The technology should find its way into electric vehicles by the first half of 2013.
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