USA: Business.A123 Romulus plant to begin production in 2012, Livonia plant to expand

A123 Systems, a developer and manufacturer of advanced lithium ion batteries and battery systems, is rapidly expanding its base in Michigan after signing a deal with Fisker Automotive.

David Vieau, president and chief executive officer of A123 Systems, said the combination of a $249 million grant from the Department of Energy and successful stock offering last fall has provided the financing for the company’s expansion in the Detroit area.

Fisker has now built up its engineering center in Pontiac to house more than 200 engineers and is making plans to export vehicles from the U.S. to around the world within the next three years.

The company also announced that it had secured access to an additional $115.3 million in private equity funding to develop plug-in hybrid cars. This funding is necessary for Fisker to use a $528.7 million U.S. Department of Energy conditional loan.

“Raising $115 million in these times speaks volumes about the value of our business model and the vast potential of plug-in hybrids,” said Henrik Fisker, the company’s founder and chief executive.

Fisker said recentlythat his new company will have its first plug-in hybrid car on the road by October. The Fisker Karma will have a price tag of $87,900 and Fisker hopes to be selling more than 150,000 vehicles annually by the middle of the decade as it rolls out less expensive vehicles.

The success of the Fisker-A123 venture could be instrumental in helping lift the state economy out of its long-standing funk, experts suggest.

Mike Hanley, Ernst & Young LLP Global Automotive Leader, said that although only 10 percent of the drivers responded positively to the idea of purchasing plug-in hybrid or electric vehicles, the positive responses were too many to ignore.

“Even if only a small portion of the 10 percent of survey respondents who said they would consider a plug-in hybrid or electric vehicle when introduced are serious, there would still be more than enough demand to sell out the 2010 and 2011 production runs of the major and new manufacturers, while buying crucial time to build out infrastructure and increase public awareness,” Hanley said.

One of the companies eager to help power the electric car revolution is A123 systems, which was spawned by the Massachusetts Institute of Technology.

“Our strategy is to deploy capital as we see customer demand developing, and we are encouraged by recent developments and the momentum within our overall portfolio of customer relationships across our key target markets,” said Vieau.

A123 Systems will provide Fisker Automotive with advanced automotive battery systems, which meet Fisker’s technical specifications for power and energy density, safety and durability.

The Fisker Karma is expected to have a range of 50 full-electric miles on a charge of A123’s lithium ion battery system and a total range of 300 miles with an on-board generator. The car is designed to go from 0 to 60 mph in six seconds, reaching a top speed of 125 mph.

Fisker Automotive and A123 will also collaborate on Fisker’s Project Nina platform, with the intent of having A123 supply batteries for that vehicle based on meeting the automaker’s performance and delivery requirements. Project Nina is expected to launch in 2012. The Nina is expected to cost around $40,000 when it reaches the market.

Meanwhile, Vieau said the initial investments in the A123 plant in Romulus will establish the company’s North American coating operations and the plans are for the facility to be ready for production during the first half of 2011.

A123 also now plans to more than double the size of its battery-production cell center at a 300,000-square foot plant in Livonia.

The investments will expand the company’s global final cell assembly capacity to more than 360 megawatt hours, with the incremental 200 megawatt hours of capacity expected to be ready for production during the second half of 2010.

The expansion in capacity will provide A123 with the overall ability to produce more than 320,000 hybrid vehicles or more than 24,000 plug-in-hybrid vehicles. A123 will continue to evaluate additional investments in production capacity in response to anticipated customer demand, Vieau said.

A123 also will create skilled job opportunities for Michigan’s workforce including construction, engineering, sales and marketing, administration and research and development, with initial hiring to begin this year, he said.

Besides the supply agreement, A123 also announced it planned to invest up to $23 million in Fisker Automotive’s current funding round in order to establish a strategic relationship with the car company. The contemplated investment would consist of $13 million in cash and $10 million in A123 common stock.

The investment would closely align the interests of both companies in delivering innovative technologies for safe and reliable PHEVs. This investment would also allow Fisker Automotive and A123 to work closely together to optimize the performance of future vehicles, Vieau said.
Source: theoaklandpress.com

Related posts:

1. A123 sets up new business unit to focus on autos
2. USA: A123 Systems In Battery Supply Pact With Fisker Automotive
3. USA/Europe: Plug-in bus developer to expand in Livonia
4. USA/UK: Coulomb Distributor Carbon Day Announces Initiative with Enterprise and A123
5. USA: Battery maker A123 Systems seeks cash from IPO