Chrysler's electric car vaporware moves a byte closer toward production reality.
Less than a week after announcing that it would supply the lithium ion batteries for Chrysler LLC’s electric vehicles, A123 Systems has obtained a $69 million investment from General Electric to expand research centers in the states of Massachusetts and Michigan.
The money will also help develop A123’s efforts to move into other business areas such as the smart grid and utility-scale energy storage, said Mark Little, GE’s Senior Vice President and Director GE Global Research. Little will join A123’s board of directors.
It also puts GE’s clout behind Chrysler’s claims that it is on the verge of producing electric vehicles. Chrysler has until the end of the month to produce a plan for the company’s future that would include a merger with the Italian-carmaker Fiat and necessary bridge loans from the US government.
Chrysler also has to work out a deal with creditors that put up the money for Cerberus bid for Chrysler in 2007.
Beyond providing capital, GE, through GE Global Research, provides system design expertise and supported A123’s stationary power product development for electric grid applications, and help to design battery system components for A123′ automotive programs.
“The advanced battery market is at a tipping point, and our support of A123 marks the application of GE’s resources at the right time to capture leadership in an essential new field,” said Little. “Our resources, engineering and R&D capabilities will have the potential to play an important role as A123 scales up its operations at this critical juncture. I look forward to joining A123’s Board of Directors and working closely with the company’s experienced team.”
“A123 has broken through many technical and engineering barriers to advance lithium ion batteries to commercial applications,” said GE Chairman of the Board and CEO Jeff Immelt. “As a company also focused on technology innovation, GE is excited to expand our relationship with this close and long-time partner. GE’s capital, resources and technology expertise will help A123 scale up faster and more efficiently,” Immelt said.
In addition to the private capital, A123 is seeking taxpayer funds under federal and state stimulus programs to ramp up its production capabilities in Michigan. The company’s planned production facilities would be capable of supplying battery systems for five million hybrid electric vehicles or a half-million plug-in electric vehicles per year by 2013.
“We’ve accelerated our plans to expand our US manufacturing. We do not believe our country can afford to wait to develop advanced batteries,” said David Vieau, A123Systems’ President and Chief Executive Officer. “With this financing, we will begin an expansion that we expect to accelerate upon receipt of government funds. This expansion would create jobs and enable innovation.”
The manufacturing plants are expected to produce battery cells and systems to meet the needs of A123’s broad automotive customer portfolio, which includes several vehicle manufacturers and 19 vehicle models — ranging from hybrid electric vehicles to electric vehicles. A123 was recently awarded battery development and supply contracts for Chrysler’s first generation electric vehicle line-up and the Chinese automaker SAIC Motor Corp.’s new hybrid vehicle models, both scheduled to debut in 2010.