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A123 Systems shares tumble after downgrade

Shares of A123 Systems Inc. slid Monday after Wunderlich Securities downgraded the stock, warning that slow adoption of electric vehicles in the U.S. and Europe will stretch out the time it will take for the company to make a profit.

THE SPARK: Wunderlich analyst Theodore O’Neill cut A123 to “Sell” from “Hold” and lowered his price target to $6 from $9.

THE BIG PICTURE: A123 makes the lithium-ion batteries that help power electric cars.

But in a note to investors, O’Neill said that adoption of electric cars in the U.S. and Europe is ramping up slower than he expected.

He said discussions with auto makers shows that few players in the industry are sure of what kind of electric car consumers will buy, and that uncertainty is holding back production on a bigger scale.
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