By on December 19, 2009

Eastpower! Picture courtesy

After a two year neck-and-neck race between battery makers LG Chem and A123, GM awarded its Volt contract to Lucky Goldstar – make that LG Chem, or rather their subsidiary Compact Power: Now the Lucky Guys are waiting for the thing to hit the road in large quantities. A123 was widely regarded as the far better technology, the Koreans most likely were cheaper – we’ll most likely never know.

Now, A123 cut a possibly much bigger and more lucrative deal. A123 is forming a joint venture with China’s top carmaker SAIC to build and sell battery systems for electric vehicles in the world’s largest auto market, and possibly beyond.

According to Reuters, A123’s joint venture with SAIC would build complete vehicle traction battery systems for hybrid electric, pure electric passenger vehicles, and heavy-duty truck and buses in China.

Jason Forcier, who leads A123’s automotive division, wants “to be basically the market leader in China, both in the truck and passenger car market.” With someone like SAIC, this is virtually guaranteed.

Quite oddly, SAIC is also the joint venture partner of GM in China.

With A123, China received leading edge technology, and they will bring the cost down. “Cost is the real driver in this market,” Forcier said. Together with SAIC, he wants to bring down the cost of batteries by as much as 35 percent in the next few years.

Currently, the cost of battery systems for electric vehicles or plug-in hybrids can range from about $8,000 to $15,000.

The venture will be called Shanghai Advanced Traction Battery Systems Co, owned 51 percent by SAIC and 49 percent by A123.

In the short term, the Chinese bus market is seen as an attractive segment for the company, given the government support for electric-powered buses. The passenger car market is much more lucrative in the long term, Forcier thinks. China is serious with electric vehicles, a solution thought to solve the smog problem and the dependency on foreign oil. China has coal and nuclear power in abundance.

A123, founded by scientists linked to MIT, is currently working with BMW, Daimler, and Renault. A123 also has relationships with suppliers like Delphi and Magna Steyr.

First job of the JV between A123 and SAIC will be to develop batteries for the hybrid Roewe 750 sedan and a plug-in hybrid version of the Roewe 550. They should hit the market in 2012.

If the Volt ever makes it to China, you can bet your sweet derriere that it will be powered by batteries Made-in-Shanghai.

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11 Comments on “Shunned Volt Battery Maker Joins Forces With China...”

  • avatar

    So will this actually make A123 profitable, or will it remain a modern-day stock for Greenies looking to lose some money?
    On the bright side, it will settle the legal dispute over who owns this technology when “partner”  SAIC steals it.

    • 0 avatar
      also Tom

      They own 51% going in. Haven’t they already stolen it? Isn’t this a repeat of the same cynical kind of operation for all the majors in China..that they go on for big money short until their technology is stolen and copied by the Chinese, who will then kick them out? Also telling that GM went for cheaper instead of better yet again. Meet the new boss…same as the old boss.

  • avatar

    No surprise here – A123 is a battery company that is looking for business.
    What I don’t understand is that it wasn’t newsworthy when they joined with German companies to do business but it it worth a headline and post when they do business with a (gasp) Chinese company? People really need to get over “oh my god the Chinese are coming” syndrome.

  • avatar

    Can anyone think of a joint venture like this that has actually worked? I can’t, and over the years I’ve seen a lot of them. They never work. You marry together two companies that have very different goals and expect them to be happy. Never happens.

    • 0 avatar

      Every Oil industry project above the size of trivial (for the oil industry) is a joint venture if it isn’t state owned. So according to you the oil industry doesn’t work.

  • avatar

    SAIC-VW, working miracles since 1984
    SAIC-GM, the only bright spot at GM
    FAW-VW, working just divvy
    Must I go on?

  • avatar

    A123 will be glad they are not the Volt supplier.  Who wants to lose money?  The China deals will be much more rosy.

    • 0 avatar

      I agree that Chinese auto ventures have a brighter collective future than the Volt does, but disagree that this outcome will be  good for A123.    When a U.S. battery maker is passed over by U.S. Government Motors for its star product, and instead picked up by a foreign nation known for stealing technology, it suggests a short future for A123.

    • 0 avatar

      They must not be too concerned about China stealing the technology since A123 makes all their cells there.  Yes, their corporate is in MA but the chicken could still run without its head

  • avatar
    Bubba Gump

    Cobasys partnered with A123 for the Plug in Saturn Vue (which was finished and completly tested but never put into production) The end result of the testing of those was that A123 could simply not package the power required into the proper form factor the Volt program given their annode design. Round VS Prismatic. They make a great battery but for packaging round sucks.

  • avatar

    As has been spoken, they make round cells, good for power tools, but not so good for cars that need prismatic cells, which are flat.  I think going with the more established company was a good idea as well.  If A123 went under before the Volt was released, it would look really bad for GM.  Working with a startup company is risky.

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