Fisker to Put A123 Batteries in Its Karma Luxury Plug-in Hybrid

Order comes at time when A123 is reporting deep quarterly losses and scaling back its Chrysler supply deal.

Published: 17-Jan-2010

IRVINE, CA -- A123Systems (AONE), the advanced battery maker best known for its surprisingly lucrative IPO in September of last year, has landed itself back on the industry’s radar. It’s just inked a deal to supply Fisker Automotive with batteries for its highly-anticipated plug-in hybrid, the Karma, slated to launch late this year.

This is great news for A123, which had been fairly quiet since its public sale, reporting deep quarterly losses and paring down its major supply deal with Chrysler — one of the only big automakers to slash its green car programs. With Panasonic snapping up a supply contract with Tesla Motors and Ford turning to competitor Johnson Controls-Saft, things looked pretty bleak for A123. But now, with another bright EV star hitched to its wagon — especially one that was officially blessed with $528 million in loan guarantees from the U.S. Department of Energy — A123 might be able to reclaim its title as the green battery company to watch.

The multi-year deal with Fisker includes a $23 million investment from A123 in the carmaker, including $13 million in cash. In return, it will not only be tapped to supply batteries for the $90,000 luxury Karma, but also for the stealthy Nina model Fisker has been talking about since last fall, assumed to be a more practical, moderately-priced sedan set to compete with Tesla’s Model S. As a result of the deal, A123’s stock price jumped from $20.05 to $21.74 from market close to market open today (though now it’s back down to $20.67).

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