A123, Leading Battery Innovator, Seeks Strategic Assistance

Battery recall and then poor first quarter results leave company reeling

1 min read
A123, Leading Battery Innovator, Seeks Strategic Assistance

This week, two months after a costly and embarrassing battery recall, A123 Systems released sharply lower first-quarter revenues and earnings: The battery innovator posted a first-quarter loss of $125 million, with revenues down 40 percent from the first quarter of 2011, a result far worse than investors had anticipated, according to the Wall Street Journal. Struggling to regain confidence and in desperate need of a short-term cash infusion, the maker of nano-technology-enabled lithium ion batteries announced it was seeking strategic guidance.

Over the years, A123 Systems has received extensive support from the U.S. Advanced Battery Consortium and obtained $128.6 million in grants from the U.S. Department of Energy to build a manufacturing plant in Michigan. With Republicans eager to highlight Obama Administration failures in "picking technology," could the A123 situation turn into a significant political liability for the president, like the Solyndra debacle? Not likely. The battery consortium itself goes back decades, predating even the Clinton Administration. And Energy Secretary Chu long ago expressed doubts about whether lithium ion is the best way to go in advanced car batteries, as Dexter Johnson pointed out here, two months ago.

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We Need More Than Just Electric Vehicles

To decarbonize road transport we need to complement EVs with bikes, rail, city planning, and alternative energy

11 min read
A worker works on the frame of a car on an assembly line.

China has more EVs than any other country—but it also gets most of its electricity from coal.

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EVs have finally come of age. The total cost of purchasing and driving one—the cost of ownership—has fallen nearly to parity with a typical gasoline-fueled car. Scientists and engineers have extended the range of EVs by cramming ever more energy into their batteries, and vehicle-charging networks have expanded in many countries. In the United States, for example, there are more than 49,000 public charging stations, and it is now possible to drive an EV from New York to California using public charging networks.

With all this, consumers and policymakers alike are hopeful that society will soon greatly reduce its carbon emissions by replacing today’s cars with electric vehicles. Indeed, adopting electric vehicles will go a long way in helping to improve environmental outcomes. But EVs come with important weaknesses, and so people shouldn’t count on them alone to do the job, even for the transportation sector.

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