A123 Systems Gets Federal Grant Extension

A123 Systems Inc. now has until December 2014 to use a $249 million federal grant.

Created to encourage advanced battery development and create jobs in the United States, the U.S. Department of Energy (DOE) grant earned by the lithium-ion battery maker is earmarked to build an A123 battery factory in Michigan.

A123 declared in a financial release last week that the DOE agreed to extend the contract. A123 originally had until the end of this year to access the full amount.

A123 had received $127 million of the DOE grant by the end of 2011. Grants of this nature generally stipulate that the company must match at least a portion of the money provided by the U.S. government.

A123 is the supplier chosen by GM for Chevrolet’s all-electric Spark. A123 is also the supplier of batteries for the Fisker Karma.

This grant extension is a good news. A123 has been shaken lately when a Deutsche Bank analyst cut his recommendation from “buy” for its stock to “hold”; and had to take a $55 million hit when issues arose with the Fisker Karma batteries.

On the positive side, A123’s co-owned Shanghai-based joint venture company, has been selected mid-March to develop battery packs for a new plug-in hybrid electric (PHEV) sedan from Geely.

A123 currently has a battery manufacturing plant in Livona, Michigan.

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  • anonimous

    gov’t ripoff

  • john iv

    Why would the government extend the time period? It seems A123 is having problems. Why give them more time and space? Isn’t there other companies that have done well that would be better served.

  • larry68

    There is so much that you can get from this grant. I am glad to see that it was extended here. So much will come from this in the future. spa in orlando

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