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.