A123 Systems files for bankruptcy: Here’s what you need to know - lithium battery price

This is good news for those who like the political debate on energy policy: A123 Systemcar-
As part of the stimulus bill, battery makers received $0. 249 billion in federal grants and applied for Chapter 11 bankruptcy protection on Tuesday.
The Wall Street Journal has details here.
The company has not completely disappeared.
It will sell $0. 125 billion in car assets to the United States. S.
Manufacturer Johnson Controls will provide financing for companies in bankruptcy.
So far, A123 has used only half of the federal funding, or $0. 129 billion, to build a factory in Michigan --
A factory that is temporarily open.
With A123 receiving stimulus money, it could become a political material.
Mitt Romney has stepped in: "The bankruptcy of a123 is another failure of the president's disastrous strategy of gambling billions of taxpayer dollars on government strategy --
Led growth that doesn't work at all.
"So, let's take a look at some of the facts about the A123 System --
Stimulus plan-
Funding the battery industry more broadly: 1)
A123 has a good idea for the battery
Looks promising in 2009.
This company is
Created in 2001 byYet-
Jiang Ming, a material scientist at MIT, developed a new technology for fast
Charging Lithiumion batteries.
As of 2009, the company raised $0. 35 billion in private funds through its initial public offering, $0. 38 billion, and received $0. 135 billion in tax relief from Michigan, and received a $0. 25 billion grant from the federal government as part of the stimulus package. Hope is high.
Every member of the Michigan congressional delegation, Democratic and Republican, hadco-
Signed to energy minister steven Chu a letterhead 2009 supporting a123's application for federal support.
The company used some federal funding to build a manufacturing plant in Livonia, Michigan. 2)
But as a new AmericanS.
The battery industry is struggling, so is a123.
The 2009 stimulus package includes $2.
Kick 4 billion-start a U. S. electric-car-
Battery industry.
But, as we have pointed out before, the industry has been struggling since then.
As sales of electric vehicles remain weak, there is still too much battery capacity and insufficient demand.
More importantly, battery factories in Asia are still very competitive, in part because they are starting very well.
Chevrolet Volt, for example, still imports batteries from South Korea.
In addition to these general pressures, the A123 System has also made its own mistakes, as stated in the Kevin bliss document.
The company relies too much on a customer, Fisker, who is slow to bring Karma electric cars to the market.
When Fisk finally ordered the battery, A123 rushed to fill the battery and finally produced the defective battery --
A mandatory recall of $55 million.
According to Bullis estimates, A123 needs to sell 10 times the battery pack, which is about 50,000 battery packs per year, in order to make a profit. 3)Another U. S.
Johnson Controls will take over factories, technologies and customers in Michigan.
A123 has two battery factories in Michigan and an equity stake in a battery manufacturer in Shanghai.
Johnson Controls will acquire these assets, as well as a123's contract to provide batteries for Fisker and the upcoming Chevrolet Spark.
However, it is not clear yet that a123
Provide battery and other automotive services to the power grid.
As early as August, the representative. Cliff Stearns (R-Fla. )
He expressed concern about China's auto industry.
Wanxiang Group, a component manufacturer, may acquire a123's "taxpayer-funded sensitive intellectual property rights ".
"But after providing an early loan, Wanxiang now seems to have pulled out of the competition for A123. 4)
Of the 30 battery and power-driven companies that received stimulus money, A123 was the second to go bankrupt.
Let's review the stimulus scorecard.
So far, 30 battery and power-driven companies have received stimulus money.
A complete list.
So far, A123 Systems and Ener1 have filed for bankruptcy. (
However, it is important to note that EnerDel, a subsidiary of Ener1, which actually received stimulus money, has never experienced restructuring and has been running two factories in Indiana. )
Similar, 26 clean.
Only three applications for bankruptcy under a separate 1705 program for energy projects secured by federal loans, including sorindra, Abound and Beacon Power. (
Still, Beacon is still operating and has basically repaid loans backed by the federal government. )5)
For those curious, this is the government's defense of its wider battery investment.
On the DOE's website, public affairs officer Dan Lestikow put forward his views on the bankruptcy of A123.
First of all, he pointed out that the factory of a123 did not disappear.
They were taken over by Johnson control.
He wrote: "in emerging industries, it is common to see some companies merge with others as the industry develops and matures.
"Second, Lestikow wrote, wait. S.
The battery plant is still growing strongly, such as the newly expanded Rockwood Lithium plant in North Carolina.
Third, he believes the stimulus will help the development of electric vehicles.
Battery prices dropped from $33,000 before the stimulus to $17,000 today and are expected to reach $10,000 by 2015.
Lestikow wrote: "as costs go down further, the hybrid and electric vehicle market --
This has almost doubled in the United States. S.
From last year
Will grow further.
"This is a big gamble to stimulate investment.
The energy sector hopes to make electric vehicles affordable and widely available by reducing battery costs.
But the plan didn't go well.
Two federal-backed companies have gone bankrupt.
That is why it is often the subject of criticism now.
* Corrected that A123 received a federal grant instead of what was originally said as a loan guarantee.
Read further :-
Here's why we talked about America. S.
The battery industry is struggling. —
To look more optimistically at the future of electric vehicles, a McKinsey report in July predicted that battery prices could fall sharply soon, making electric vehicles truly competitive in the near future.