The Truth About Cars » A123 Systems The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 29 Jul 2014 11:00:58 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » A123 Systems Fisker May Follow A123 To China Fri, 15 Feb 2013 17:23:16 +0000

Reports by Bloomberg suggest that Fisker could sell up to an 85 percent stake to Chinese automaker Dongfeng. The automaker apparently bid $350 million for the beleaguered plug-in car maker, according to sources close to the company.

With a $200 million Department of Energy loan still outstanding, and a possible cash crunch looming mid-year, Fisker has been looking for a buyer. Company spokesman Roger Ormisher told Bloomberg

“The company has received detailed proposals from multiple parties in different continents, which are now being evaluated by the company and its advisers,”

If Fisker were to be sold to Dongfeng, the possibility exists that production of its vehicles would move from Finland to China, without the ex-GM factory in Delaware having ever produced any cars. Fisker’s battery supplier, A123 Systems, declared bankruptcy in 2012, and was sold to a Chinese firm.

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A123 Wants to Void Contract with Fisker, Fisker Says That Would Disrupt “Ongoing Business” Thu, 01 Nov 2012 17:08:51 +0000 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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A123 Files For Bankruptcy, Johnson Controls To Take Over Tue, 16 Oct 2012 20:22:55 +0000

Reuters reports that battery maker A123 Systems is filing to bankruptcy protection in Delaware.

The company has received cash infusions from China earlier this summer, and its financial situation has been precarious, to say the least. Political controversies were also part and parcel of the story, as with any green energy project today, and A123 received a $249 million dollar grant from the Obama administration in 2009. A123 supplied battery technology to Fisker and General Motors.


Johnson Controls will be purchasing the remnants of A123, while providing $72.5 million in funding to help A123 continue operations as it goes through bankruptcy proceedings.

Crain’s Detroit Business is reporting that

Under the deal, the Waltham, Mass-based A123 will pay to license technology its own grid, commercial and government technologies from JCI.

Presumably, A123′s brand will carry on under the JCI empire. That won’t do much for the beleaguered battery company, which apparently posted 14 consecutive losing quarters, and has $376 million in debt versus $459.8 million in assets. In the filing, A123 noted

“The company may not have sufficient cash to fund operations and may need to seek the protections provided under the U.S. Bankruptcy Code…No assurance can be given that the company will be able to avoid restructuring, reorganization, or a bankruptcy filing.”

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A123 Systems Recalling Battery Packs Used In Fisker Karma, Other Cars Mon, 26 Mar 2012 16:35:04 +0000

A123 Systems will be replacing battery packs built at their Livonia, Michigan plant that contain prismatic cells – the same type used in the Fisker Karma. The recall is estimated to cost A123 about $55 million. The defective batteries are linked to the recent problems experienced by Fisker Karma owners, according to A123 CEO David Vieau.

The Karma is the single largest customer of prismatic cells from the Livonia plant. Green Car Reports claims that other cells built in China for different applications are not affected. John Voelcker of Green Car Reports describes the problem as

“…defect [that] was traced to a miscalibration in an automatic welding machine at the plant, which resulted in a misaligned component was not detected visually.

When the cells were compressed, interference could be created although the cells functioned properly at first. A123 says the defect does not cause a safety issue, and has had no reports of any safety concerns in any of the products.”

Vieau said that A123 will have to adjust their fundraising strategy to pay for the recall, but was forthcoming about accepting responsibility for the matter. “We make no excuses and we accept full responsibility for this action,” he said.

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Geely Plug-In To Use Same Battery Supplier As Fisker Thu, 15 Mar 2012 20:47:22 +0000

Geely has chosen their battery technology partner for their new plug-in hybrid vehicle, and their supplier, A123 Systems Inc., may not be a familiar name to everyone, but their wares have been used by other vehicles like the Fisker Karma.

Advanced Traction Battery Systems, A123′s Chinese joint venture partner, will supply batteries for the Geely plug-in. The car is expected to go on sale in 2014. No word on whether A123 will play a role in future development of Volvo’s plug-in hybrids. A123′s stock price has fluctuated wildly over the last year or so, and recent news of Fisker battery problems (not to mention this article from the end of 2011) hasn’t helped the Mass.-based battery maker’s fortunes.

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Another Plugin Problem: A123 Warns Of “Potential Safety Issue” With Fisker Karma Battery Tue, 27 Dec 2011 16:20:24 +0000

In the ramp-up to the launch of the Chevy Volt and Nissan Leaf, a great debate seized the engineering community: was Nissan opening itself to problems by not including a active thermal management system for the Leaf’s battery pack, or was Chevrolet’s liquid-cooled approach simply adding unnecessary complexity? Well, thus far, the verdict seems to be in Nissan’s favor. Though Leaf has been troubled by some dissatisfaction with its real-world range, the Volt has endurd the first technical semi-scandal of the plug-in era, when federal regulators found that ruptured coolant lines could cause fires. Now the liquid-cooled approach is hitting its second challenge, as Fisker’s battery supplier A123 Systems is warning in a letter [PDF] that

some of the battery packs we produce for Fisker Automotive could have a potential safety issue relating to the battery cooling system.


In its warning letter, A123 explains

Specifically, certain hose clamps that are part of the battery pack’s internal cooling system were misaligned, positioned in such a way that could potentially cause a coolant leak. Over time, it is possible that in certain rare circumstances, this coolant leak could potentially lead to an electrical short circuit.

There have been no related battery performance or safety incidents with cars in the field. However, A123 and Fisker are committed to safety and are taking immediate, proactive steps to prevent any issue from occurring.

We have developed a confirmed repair for this situation. In the short time since recognizing this potential safety issue, the root cause was quickly identified, a fix has been developed and corrective action is well underway.

In total, fewer than 50 customer cars are involved in this action.

Bloomberg adds that the problem has been caught relatively early, as Fisker is still producing just 25 Karmas per day at Valmet’s contract-manufacturing plant in Finland. Production is scheduled to hit 60 units per day sometime next year. Meanwhile, A123 is also preparing to start supplying batteries to Chevrolet’s Spark EV, so GM is probably breathing a sigh of relief that it’s catching battery problems before that contract starts. Still, these early issues with battery cooling systems are tipping the debate in favor of the cheaper, less-complex passive cooling approach… for now, anyway. When Summer arrives and temperatures rise, we’ll be keeping an eye on the Leaf fleet to see if problems pop up there.

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Chrysler Cancels Hybrid Ram, Approves Fiat 500 EV For Production Mon, 22 Mar 2010 18:08:17 +0000

In the leadup to its bailouts and bankruptcy, Chrysler seemed to have suddenly gotten religion about zero-emissions technology, parading around several ENVI electric vehicle prototypes. By the time Fiat had cleared the cobwebs from new product development in Auburn Hills, the EV vaporware had faded into nothingness. With the need to impress politicians ostensibly in Chrysler’s past, the ENVI program was rolled into Chrysler’s normal product development process, and we no longer had to choke back laughter at the idea that Chrysler would replace its unloved Sebring with the pure-electric 200C concept. Chrysler’s embarrassing Two-Mode hybrids were also hidden from view, with only a vague indication that a hybrid Ram might someday become available. When we talked to Ram CEO Fred Diaz at last November’s Five Year Plan announcement, he said that a hybrid Ram was still being considered. Now, egmcartech reports that the Ram hybrid is dead from a commercial standpoint, and that the program will turn into a plug-in hybrid test fleet for Chrysler’s best partner: The Department of Energy, which gave the form $48m to develop a fleet of 140 plug-in Rams. But don’t worry consumers, there’s an alt-energy Chrysler in your future… sort of.

Though the Ram Hybrid has reverted to its original purpose (convincing politicians their (our) money was well-spent on Chrysler), an electric version of the Fiat 500 has been approved for production, and will go on sale starting in 2011. The Freep reports that 500s built at Toluca, Mexico, will have A123 Systems lithium-ion battery packs installed at an undisclosed location, to create the Fiat 500 EV. Chrysler won’t reveal the 500 EV’s power, capacity or range, let alone its price point. Meanwhile, the 500 EV will come out after the Nissan Leaf and Chevrolet Volt start making inroads on America’s EV early adopters.

Needless to say, none of this is wildly encouraging. our interpretation has been that Chrysler avoided too much talk of alt-energy drivetrains because its core business is in such bad shape. Thus far, nothing has changed that conclusion. Chrysler will be releasing some 14 new or refreshed products in the next 12 months, and making those launches successful will require the full attention of Chrysler’s limited resources. A major component in those plans is the need to develop a Fiat 500 dealer network, and the 500 EV won’t be going anywhere until that has been resolved. And Chrysler’s relationship with its dealers still needs a lot of work before new franchises can be issued. If Chrysler does launch a number of halfway-respectable products next year, a niche EV isn’t a bad place for expansion, but it will be entering the market late and will be spearheading its efforts with an expensive little a car that will likely offer few advantages over a Smart EV.

It’s going to take a lot more than this announcement to make Chrysler believers out of us.

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Tesla IPO in the works? Sun, 22 Nov 2009 18:15:00 +0000 In need of a charge?

Reuters reports that Tesla is planning an Initial Public Offering, after postponing planned IPOs in 2008 and 2009. Tesla reportedly hopes to capitalize on the recent success of battery developer A123 Systems, on the assumption that the A123 IPO has raised interest in electric auto firms. According to one of Reuters’ sources, Tesla’s IPO filing could be made “within days.” And the Silicon Valley startup, which currently has only one product, the $100k+ Tesla Roadster, will most likely have to hurry. Both Nissan and General Motors plan to enter the electric car market this year, marking the initial entries by established auto OEMs into the American EV market. Both of their initial products, the estimated $30k Nissan Leaf and the estimated $40k Chevrolet Volt, will cost considerably less than Tesla’s estimated $50k Model S sedan and will beat it to market by at least a year. Acquiring funding after cheaper competing models go on sale could be extremely challenging for a boutique automaker like Tesla.

Though the motivations for a quick Tesla IPO are clear, the odds of success are far from guaranteed. A123 has major contracts with established OEMs, whereas Tesla has only a minor electrification deal for Daimler’s dying Smart brand. And despite a soaring stock price after its IPO, A123 has come down to earth after Chrysler (an A123 customer) essentially shuttered its EV development. Though Tesla is largely insulated from such OEM volatility, the Smart brand’s struggles could lead to the cancellation of one of its few source of revenue. Meanwhile it still has yet to build its first plant and is being kept alive by $465m in Department of Energy loans. In fact the best argument for a successful Tesla IPO is the popularity of its electric roadster among the Silicon Valley elite. IPOs are rarely rational phenomena, and local homerism could just provide Tesla with sufficient capital to take its Model S to market. After all, GM’s IPO strategy doesn’t seem much different, as it seems likely to make an offering prior to the launch of its own Volt EV. Tesla could just be a canary in the EV-based IPO strategy coalmine.

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