#a123

In his 2012 State of the Union address, President Barack Obama said this to critics of his lavish green technology initiative:

“I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. “

Instead, battery manufacturers first get financed by double-green government handouts, then they are ceded.

Troubled battery maker A123 is getting another lifeline. This time, from China. Wanxiang Group will invest as much as $450 million in the company, says Reuters. Wanxiang, one of the largest Chinese auto component makers. A123 will soon be Chinese.

The irrational electrification exuberance claims another victim: Battery maker A123 Systems Inc is running out of money. A lot of it is your money. Says Reuters:

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.

Battery firm Ener1/EnerDel, which recently brought the EV firm Th!ink back from bankruptcy, has lost the battery contract for Fisker’s Karma luxury EV. According to Schaeffersresearch, Ener1 “decided it would be better pursuing higher-volume battery supply deals when larger automakers begin rolling out their versions of electric cars.” Says Ener1 CEO Charles Gassenheimer, “we have some capacity constraints on our side. We’re interested in high volume programs in the future.” The public story is that due to Ener1’s Th!nk tie-up, Fisker’s October sales roll-out was too much, too soon. The real story illustrates the complicated relationships emerging between EV firms and battery suppliers.

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.