Thursday, January 14, 2010, Novi, Michigan: Michigan is taking another significant step towards its goal of becoming the "advanced battery capital of the world" with the announcement of a supply agreement between A123 Systems and Fisker Automotive which will develop and manufacture electric batteries in the state. Michigan Governor Jennifer Granholm spoke at the press conference and toured the new facilities.

A123 Systems is a developer and manufacturer of advanced Nanophosphate™ lithium ion batteries and systems. Fisker Automotive is a new American automaker building premium green vehicles.  A123 Systems expects to hire hundreds of workers in construction, engineering, sales and marketing, administration, and research and development.

The supply agreement is for battery systems for the Fisker Karma Plug-in Hybrid Electric Vehicle (PHEV). The Karma is scheduled to be launched in late 2010 and expected to be one of the cleanest, most fuel-efficient cars in the world while still offering industry-leading style and performance.

A123 Systems will provide Fisker Automotive with advanced automotive battery systems that combine high power and energy density with excellent safety and life performance -- characteristics required to meet Fisker’s stringent technical specifications.  Fisker Automotive and A123 will also collaborate on Fisker’s Project Nina platform, with the intent of having A123 supply batteries for that vehicle based on meeting the automaker’s performance and delivery requirements. Project Nina is expected to launch in 2012.

DOING BUSINESS IN MICHIGAN: WORLD-CLASS LITHIUM BATTERY MANUFACTURING IN THE UNITED STATES

During the fourth quarter of 2009, A123 announced that it signed a lease for a 300,000 square foot facility in Romulus, Michigan.  A123 announced today that the initial investments in this facility are to establish the company’s North American coating operations, and current plans are for the facility to be ready for production during the first half of 2011.   

The new facilities in Livonia and Romulus will comprise stages of production from coating and cell assembly to final assembly of complete automotive battery systems.  These facilities will provide a diverse set of skilled job opportunities for Michigan’s workforce including construction, engineering, sales and marketing, administration, and research and development, with initial hiring to begin this year.   This expansion in Michigan is a critical part of A123’s commitment to build world-class lithium ion battery manufacturing in the United States.

THE FISKER KARMA

The Fisker Karma is expected to have a range of 50 full-electric miles on a charge of A123’s lithium ion battery system and a total range of 300 miles with an on-board generator turned by a traditional but efficient four-cylinder gasoline engine. The Karma features 403hp and is designed to go from 0 to 60 mph in about six seconds, reaching a top speed of 125 mph.

In addition to entering into the supply agreement, A123 also announced its intent to invest up to $23 million in Fisker Automotive’s current funding round in order to establish a strategic relationship with the car company.  The contemplated investment would consist of $13 million in cash and $10 million in A123 common stock and would be subject to the completion of certain terms and conditions.  

$249 MILLION GRANT AWARD FROM DEPARTMENT OF ENERGY

In December of 2009, A123 closed on its $249 million grant award from the DOE and is using the available capital to help fund its capacity expansion plans.  A123 ended the third quarter of 2009 with final assembly capacity of 169MW hours per year.  A123 announced today that it has begun to make investments in its 300,000 square foot plant in Livonia, Michigan to expand the final cell assembly capacity by up to 200MW hours once fully operational, inclusive of the previously announced 80MW hour expansion. 

These investments will expand the company’s global final cell assembly capacity to over 360 MW hours, with the incremental 200MW hours of capacity expected to be ready for production during the second half of 2010.  The expansion in capacity will provide A123 with the overall ability to produce over 320,000 hybrid vehicles with 1.1 kWh battery systems, or over 24,000 PHEVs with 15kWh battery systems per year.  A123 will continue to evaluate additional investments in production capacity in response to anticipated customer demand.

Nathan King has this report for the CNN iReport from Detroit.