Ibuynow battery won't power electric Fiat

In an earnings call earlier this week, A123 chief executive David Vieau said his

company had withdrawn from a Chrysler production program after a rival vendor said it could provide batteries at below market cost.

Chrysler and A123 originally partnered last year, when they announced that A123 would supply lithium-ion batteries for Chrysler's ENVI line. Following the automaker's bankruptcy, that program was disbanded, though the new Chrysler LLC has continued developing electric cars, and it looked like A123 might make batteries for some of those models.

For now, that won't be the case.

In a statement to the Globe yesterday, Vieau said he expects his company to maintain a good relationship with Chrysler but had "reasonably good cause'' to withdraw from the electric vehicle program.

Katie Hepler, a spokeswoman for Chrysler, confirmed that A123 would not make batteries for the Fiat 500EV production program but called the battery[laptop batteries] maker "a good development partner in this program.''

Investors battered A123 shares yesterday, sending them down about 18 percent to $8.53 a share. On Tuesday, the Watertown company reported a second-quarter loss of $34.2 million, compared with $21.9 million a year earlier.

Eric Fedewa, an analyst with IHS Automotive, said the battery industry is competitive, but he sees no reason why a company like A123 wouldn't thrive. A123, Fedewa said, is a promising company with "excellent technology'' that could become widely used.

"The future of vehicle efficiency is about electrification or further electrification of vehicles,'' he said. "So the market is open for them.''

A123 makes lithium-ion batteries, which are marketed as more environmentally friendly for cars and other products. A123 has supply deals with companies like the green carmaker Fisker Automotive and a joint venture with SAIC Motor Co. LTD, a Chinese automaker.

The battery company also has received significant financial support at the state and federal levels. A123 is building a battery factory in Michigan, funded by a $249 million federal stimulus award. The money was part of a federal program that set aside $1.5 billion for the battery[laptop battery] industry. And earlier this year, Massachusetts gave A123 a $5 million loan to expand its operations and create jobs here. The company later announced it was leasing office, lab, and manufacturing space in Waltham, where it expects to move in the spring.

Ibuynow battery won't power electric Fiat

By: www.ibuynow.com.au

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