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Electric drive industry responds to A123’s bankruptcy, takeover by Johnson Controls

Statement from Atul Kapadia, the chairman and CEO of Envia Systems

“The drive to seek cost reduction in electric cars has accelerated since the advent of companies like A123. Carmakers want more than concept vehicles. They are now commercializing true mass-market electric cars. Envia’s technology, available to select customers, more than triples the energy storage capacity of battery materials, causing a disruptive reduction in battery cost. This increased storage capacity will also reduce thickness of these cells making car batteries even safer than before. Innovation that reduces cost and improves safety is critical to bringing about a mass-market electric car revolution.”

Electric Drive Transportation Association Responds to Johnson Controls Purchasing A123 Assets

Washington, D.C.-October 16, 2012-Brian Wynne, president of the Electric Drive Transportation Association (EDTA), issued the following statement in response to today’s announcement about Johnson Controls purchasing A123 Systems’ automotive business assets:

“Consolidation is an expected market force in all emerging industries, especially one as dynamic as the global electric drive market. Advanced battery technology powers the electric drive industry, increasing the fuel efficiency of the U.S. automotive fleet and reducing our reliance on imported oil.

“Johnson Controls’ purchase agreement is a positive development for A123’s U.S. operations and for the long-term growth of the advanced battery industry. The electric drive industry is still in the early stages of market development – this is the second year of plug-in hybrid and electric vehicles availability on the mass market. The U.S. has already seen tremendous growth throughout the electric drive supply chain and battery technology during this time. The energy storage market is projected to be a $50 billion global industry by 2020.

“Standing up an entirely new supply chain is a challenge to which industry leaders are committed. Strong private investment continues and manufacturing opportunities for advanced batteries and electric drive components are growing jobs and building market share. The global race in the energy storage market is competitive and moving rapidly – it is critical that the U.S. secure a position as the leader.”

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About EDTA

The Electric Drive Transportation Association (EDTA) is the preeminent trade association promoting battery, hybrid, plug-in hybrid and fuel cell electric drive technologies and infrastructure. EDTA conducts public policy advocacy, education, industry networking, and international conferences. EDTA’s membership includes vehicle and equipment manufacturers, energy companies, technology developers, component suppliers, government agencies and others. For more information about EDTA and its members, visit ElectricDrive.org. For information about owning and operating electric vehicles, please visit GoElectricDrive.com.

Plug In America issues this response to the reported news that battery-maker A123 Systems Inc. may seek bankruptcy:

“Government can help facilitate innovation, but the natural business cycle remains – some failures in any emerging industry are inevitable,” says Jay Friedland, Plug In America’s legislative director. “Yet, our country is experiencing tremendous success as we electrify transportation. A raft of companies – Johnson Controls, Envia, Saft, GM, and LG Chem among them – are making great strides in driving down battery costs while creating a U.S.-based manufacturing sector for battery technology. This drives down the cost of plug-in vehicles while creating jobs and keeping at home the $1-billion per day we’re currently sending overseas for oil, creating a better, safer America.”

Other key considerations from the U.S. Dept. of Energy:

The advanced battery market is expanding dramatically in the United States and around the world — from $5 billion in 2010 to nearly $50 billion in 2020, an average annual growth rate of roughly 25 percent.

A123’s promising technology has a long history of bipartisan support. In 2007, the company received a $6 million dollar grant as part of the Bush Administration’s efforts to promote advanced battery manufacturing,

Prior to this investment, a battery with a 100 mile range cost $33,000. Because of technology improvements and the high volume manufacturing capability we have today, the estimated cost is down to about $17,000 and is expected to drop to $10,000 by 2015. As costs come down even further, the market for hybrids and electric vehicles – which has nearly doubled in the U.S. since last year – will grow even further.

About Plug In America: Plug In America is the preeminent advocacy organization advancing the plug-in vehicle market. The nonprofit organization works to accelerate the shift to plug-in vehicles powered by clean, affordable, domestic electricity to reduce our nation’s dependence on petroleum and improve the global environment. For more information: http://www.pluginamerica.org.
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