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USA: A123 Soars on Electric-Car Lithium Battery Advance: Boston Mover

June 12 (Bloomberg) — A123 Systems Inc. rose 52 percent, the company’s largest increase, after the maker of electric-car batteries said it has developed an improved lithium-ion cell that can cut costs of rechargeable and hybrid vehicles.

The “nanophosphate EXT” cells will be produced next year and can be used longer and operate more efficiently in extremely high and low temperatures than competing lithium-ion packs, the company said today. That reduces the need for systems in electric cars to maintain a consistent battery temperature, said David Vieau, A123’s chief executive officer.

“That will eliminate weight, cost, technical complexity,” Vieau said in a phone interview before today’s announcement. “That doesn’t solve all the cost issues but it’s a step in the right direction.”

The company soared to $1.58 at the close in New York. The rise was the largest percentage gain since its September 2009 initial public offering. The increase almost wiped out a year- to-date decline. Shares had tumbled 35 percent this year through yesterday and are now down 1.9 percent for 2012.

The shares have slid 88 percent since the IPO, when investors expected A123 to benefit from Obama administration efforts to create a market for rechargeable autos.

A123 wants to boost demand for its batteries that are also used in utility grids, telecommunications systems and power tools after forecasting in a May regulatory filing several quarters of “significant” losses that raise “substantial doubt on the company’s ability to continue as a going concern.”

In March, the company said it would spend $55 million replacing batteries in Fisker Automotive Inc.’s plug-in Karma sedan, the result of flaws at its Livonia, Michigan, plant.

A123 in August 2009 was awarded $249 million in federal stimulus grants to produce batteries in Michigan.

‘Significant Changes’

The company, with investors including General Electric Co. and Japanese heavy machinery maker IHI Corp., has been developing the new cells for several years, Vieau said. Since its March announcement, Waltham, Massachusetts-based A123 has also revamped factory operations, he said.

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