By on November 1, 2012

A123 Battery Pack for Fisker Karma Image courtesy of A123. Not exactly your standard AA cells.

While Johnson Controls and China’s Wanxiang Group have competing bids to acquire the assets of advanced battery maker and Fisker supplier A123, a more serious battle is occurring in U.S. Bankruptcy Court in Delaware between the startup automaker and what is arguably its most important vendor. A123 wants the bankruptcy judge to void its contracts including those for supplying batteries to Fisker. That could stop production of Fisker’s only car, the Karma. A123 says that the existing contract with Fisker is burdensome and that the amount they are getting paid for those batteries is below market value. Fisker attorneys, in a filing with the court, have challenged A123 and said that “Fisker’s ongoing business and operations will be severely disrupted and harmed” if the court voids the contract. The pas de deux between the two companies may be spinning into a danse macabre. Twenty five percent of A123′s revenue comes from its deal with Fisker, while A123 is Fisker’s sole supplier of the lithium-ion batteries it needs to make the extended range EV Karma. There is no way that Fisker can find a supplier who can engineer a replacement battery pack quickly enough to keep the Karma in production. Electric vehicle batteries are not like AA cells that you can pick up at the corner store. While there are standard lithium ion battery formats, the Tesla Roadster is the only high profile EV that uses standard format Li-Ion cells. All other electric cars, including Fiskers, use cells specifically designed and engineered for them. The Fisker 20 kWh battery pack manufactured by A123 is made up of 315 individual Li-ion cells.

A123 image

Of course this is about money. One reason why A123 is in bankruptcy court in the first place is because of the financial hit the company took due to a recall of defective batteries supplied to Fisker. Since the companies are interdependent, my guess is that if the judge does throw out the contract, a new one will be cut, either between A123 and Fisker, or between whichever company, Johnson or Wanxiang, ends up owning A123′s battery factories.

With such an important vendor in bankruptcy court, Fisker is between a rock and something that would peg a Rockwell tester.

According to Fisker attorneys, “ the rejection of the Fisker contract represents an immediate threat of significant disruption and harm to Fisker’s business, with a corresponding negative impact on Fisker’s lenders, suppliers, customers and investors.” One of those lenders, of course, is the United States Treasury, American taxpayers having loaned Fisker almost 200 million dollars.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading– RJS

 

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26 Comments on “A123 Wants to Void Contract with Fisker, Fisker Says That Would Disrupt “Ongoing Business”...”


  • avatar
    gslippy

    “A123 says that the existing contract with Fisker is burdensome and that the amount they are getting paid for those batteries is below market value.”

    Well, no kidding. Welcome to the Alice-in-Wonderland world of EVs, where nothing is sold at market value.

    People scoffed at Tesla’s use of 7000 “18650″ cells for its Roadster, but I always thought it was a brilliant for a startup to use. It’s the most common lithium ion cell out there. But it’s not optimal for a new EV design.

  • avatar

    The Karma sucks because of the LAYOUT of the cells – which causes the car to be ridiculously compact inside. Meanwhile the Tesla Model S and it’s platformbattery make all the sense in the world.

    Right now I’m trying to figure out where to buy gas, since we are in a post-apocalyptic gas shortage right now here in NYC. I gotta make a deal with the girl on the phone at the gas station to call me the moment a gas delivery gets there.

    If I had the Model S, I coulda’ plugged it in just as easily as I’m recharging my iPhone5 right now. My area rarely loses electricity -even in a crisis situation.

    • 0 avatar
      LeadHead

      Any crisis big enough to disrupt road transport of fuel is definitely big enough to potentially blow out electricity. Note how over 8.5 million people in NYC lost power initially – and ~2million people still do not have electricity.

      It takes a lot less time to bulldoze obstructions out of the road to let tanker trucks go through, then it does to repair 300KV high-tension transmission lines and replace custom multimillion dollar transformers.

      With a properly sealed and stabilized fuel, I can keep a container of gasoline or diesel for 6-12 months. For a given amount of space, gasoline holds 15x more energy than the best lithium batteries.

      • 0 avatar
        BigMeats

        Not to mention using stored gasoline to run your generator to charge your electric car if that’s all you’ve got.

        Gas Is Good.

      • 0 avatar
        noxioux

        +1

        A Tesla S as the post-hurricane disaster vehicle of choice is laughable.

        In this context, one full charge on a Tesla S versus one full tank of gas in any small pickup or SUV should be a no-brainer. I can go 400 miles, give or take, on a tank of gas in my Pathfinder. Probably further if I’m just over idle in 4 high in 4th or 5th gear. And I can cross or climb through just about anything I’m likely to find in a post-hurricane urban or suburban environment.

        And I could haul everything I’d need to live, for as long as I needed to. And if push comes to shove I can potentially recover fuel from disabled vehicles. Not possible for a dedicated electric.

        In the Tesla, I guess you could probably carry along a couple bottles of water and a copy of War and Peace (so you can have somthing to read while your solar charger takes a week to get you mobile again).

        No, bigtrucks, no matter how much you wish otherwise, the Tesla S and it’s ilk are better suited to impressing the PC greenies and valets at the country club, than living and working in the real world.

      • 0 avatar

        Keep in mind I could charge a model S off of ANY 110 volt outlet, just like my iPhone. 1 Hour of charge gives you at least 20 miles (35 miles on higher voltage 240v).

        AND KEEP IN MIND: gas stations need ELECTRICITY to work the pumps. Right now, we are in a gas crisis in NYC because:

        #1 stations with gas in their tanks are OUT OF POWER
        #2 the tankers that deliver gas come from pumping stations that are OUT OF POWER and aren’t expected to have any till monday.
        #3 If I HAVE A DIESEL GENERATOR I can recharge the car with some Diesel gas. I have two Diesel Generators! just in case electricity here went out. My neighborhood hasn’t had a power outage in over 10 years.

        The Tesla Model S has it’s benefits. #1 the electricity rate is 11c per kWh around here which will cost $2 per 300 miles. Compare that to my Jag that only gets 17mpg or my SRT8Supercharged at 10 mpg for Super premium unleaded.

        I drove it, and it’s looking like an awesome option – although I’d probably still have an I.C.E car as my girl’s car for road trips. [youtube.com/watch?v=SWHlEC-SjFM]

      • 0 avatar

        “For a given amount of space, gasoline holds 15x more energy than the best lithium batteries.”

        This is true and it used to be my main argument AGAINST ELECTRIC CARS.

        After I drove the Model S, my attitude changed ENTIRELY. Now I’ve got nothing, but praise for them.

        If I had a Model S, I’d still keep a cheap 4-cylinder (or V6) car around for road trips.

      • 0 avatar
        LeadHead

        Did you just gobble up everything Tesla told you without actually doing the math? The EPA rates the Model S at 38kwh/100mi. That would be 114kWhr from the wall to do 300 miles. At 11 cents/kwh that’s $12.54 to drive 300 miles. Not $2.00.

        Additionally, 1 Hour of charge on 110v (1.5kWh) would get you 4 miles of range. Not 20.

        As far as gas stations go, I’ve seen them powering themselves with their own generators during a power outage before. Any major fuel distribution depot is also pretty much guaranteed to have some kind of emergency generator or within short reach of one.

        ..and like I said. In an emergency I can keep 10 gallons of fuel in two sealed tanks in my garage. In a modern ICE compact, that would get me 400 miles range for $40.

      • 0 avatar

        LeadHead

        If I purchased the car, it would be with the DUAL CHARGER – not the SINGLE. And I’d also have the 100AMP wall outlet in my garage. Therefore, it would charge between 20 – 30 miles in one hour.

        If I charged once a week, it would cost me less than $3 a charge. Even if it did cost $12…or $20… that’s a hell of a lot better than the $120 I’m spending a week on either of these gas guzzlers.

        “As far as gas stations go, I’ve seen them powering themselves with their own generators during a power outage before. Any major fuel distribution depot is also pretty much guaranteed to have some kind of emergency generator or within short reach of one.”

        Tell that to the gas supply companies that can’t get it to NYC gas stations.

        “..and like I said. In an emergency I can keep 10 gallons of fuel in two sealed tanks in my garage. In a modern ICE compact, that would get me 400 miles range for $40.”

        If you get 400 miles for $40, your cars must not be much fun at all.

    • 0 avatar
      Dimwit

      Ok, I’ll bite… why wouldn’t you fill up before the storm hit?

      • 0 avatar

        filling up before the storm doesn’t matter if you’ve gotta work or get to family/friends in trouble.

        You end up USING it.

      • 0 avatar
        285exp

        I notice he didn’t answer the question. Even us rednecks in Alabama know that you fill all the cars and some spare cans before the hurricane hits. It’s not like there was no warning it was coming. Having mad rushes at gas stations, and shortages of drinking water and food only a couple of days after the storm just shows people don’t prepare.

    • 0 avatar
      gslippy

      Leaf owner weighing in here…

      As Sandy approached (the storm, not a girl), I was glad the Leaf isn’t my only car. I filled it to 100% instead of the usual 80%, just in case. As it turned out, the power at my house in western PA didn’t even blink during the storm.

      As for fuel cost, the Leaf is getting about 3.5 miles/kWh, so it’s costing me about $0.02/mile to operate. The operating cost is the same regardless of the charging speed.

    • 0 avatar
      LeadHead

      Why do you keep twisting things around, or just blatantly lie?

      This what you said: “Keep in mind I could charge a model S off of ANY 110 volt outlet, just like my iPhone. 1 Hour of charge gives you at least 20 miles (35 miles on higher voltage 240v). ”

      1 Hour @ 110 Volts can only get you 4-5 miles of range.
      ————
      This is what you said: “The Tesla Model S has it’s benefits. #1 the electricity rate is 11c per kWh around here which will cost $2 per 300 miles.”

      You said it’d cost you $2 for 300 miles, not that it would cost you $2/week. 300 Miles costs $12.54 with your electricity rate. So once again, please stop twisting things around.
      ————
      “Tell that to the gas supply companies that can’t get it to NYC gas stations.”

      We had nearly the entire state loose power during Irene, the gas stations with generators had no problems getting fuel.
      ————
      “If you get 400 miles for $40, your cars must not be much fun at all.”

      There are plenty of turbo compacts that are tons of fun to drive, and in an emergency situation, who cares? Even a V6 Mustang could get you 310 miles on $40, and those are plenty quick.

      It’s not my fault you drive vehicles that can’t break 18MPG.

  • avatar
    LeadHead

    Any crisis big enough to disrupt road transport of fuel is definitely big enough to potentially blow out electricity. Note how over 8.5 million people in NYC lost power initially – and ~2million people still do not have electricity.

    It takes a lot less time to bulldoze obstructions out of the road to let tanker trucks go through, then it does to repair 300KV high-tension transmission lines and replace custom multimillion dollar transformers.

    With a properly sealed and stabilized fuel, I can keep a container of gasoline or diesel for 6-12 months. For a given amount of space, gasoline holds 15x more energy than the best lithium batteries.

  • avatar
    APaGttH

    Fisker – dead company walking.

  • avatar
    redav

    I support EVs. However, I will get behind whatever it takes to get Fiskars off the road.

    • 0 avatar
      gslippy

      Fiskars = scissors.

      Fiskers = cars. Sorry.

      Fisker is getting themselves off the road. The Consumer Reports incident was pretty damaging. Other road reviews of the vehicle aren’t very glowing. They’ve had a few ‘burning cars’ incidents which cast lingering doubts about the design. And as a foreign recipient of ‘green dollars’, they’re a political target.

      I think they’re doomed.

  • avatar
    crackers

    I believe A123 made a critical mistake when they decided to build a new business supplying batteries to the auto industry. They would have been much better off starting with smaller markets, higher margins and reasonable customers while the technology developed and matured. Auto suppliers regularly screw over their suppliers and aren’t happy unless suppliers are continuously within a hair’s breadth of bankruptcy.

    • 0 avatar
      gslippy

      The auto industry isn’t their only game.

      They also do grid energy storage, which is a must if wind or solar is going to be of any use, and they’re involved in telecom.

      However, none of these customers is very forgiving.

      The commodity battery market is already saturated, so going into these markets was a good choice if you can deliver on price and quality.

  • avatar
    Rick Astley

    I live in Seattle and work within a few miles of the Tesla dealership and shoot billiards (competitively) a few miles from the Fisker dealership in Bellevue.

    Interestingly, I’ve seen no less than a half dozen of these vehicles dead on the side of the road (dead as in “not enough juice to turn on the hazard lights” not as in “road kill”) on various freeways around the city.

    Either their owners are idiots, or these are simply not very good vehicles to have even in the best of times.

    • 0 avatar
      corntrollio

      I’m shocked that you have seen half a dozen of these period. Here in California, where they supposedly sell well, I’ve seen a grand total of 1. Are you sure you’re not exaggerating?

      • 0 avatar
        ExPatBrit

        I live in Redmond, Rick is correct about the population of Tesla roadsters. There are already three in my neighborhood of 110 homes.

        3-4 car garages and early adopters (lots of Microsoft people and Boeing engineers). As Rick said there is a dealership in Bellevue Square , one of the nicer malls in the area with a lot less riff-Raff the demographic is just right.

        Me, I would buy an Elise and have more fun.

  • avatar
    sideshowtom98

    I live in Southern California and I see Tesla’s, Leafs, and Volts every day. Haven’t seen the new Tesla yet, just the roadster.


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