GE Expands Investment in A123Systems, Hybrid Future
What goes for political corruption is also great advice for understanding the future of gas-electric and plug-in cars: Follow the money. Consider the new round of $69 million that A123Systems, one of the leading US manufacturers of advanced auto batteries, has raised to expand its facilities in Massachusetts and Michigan. This puts the company closer to achieving its goal of supplying battery systems for up to five million hybrids or a half-million electric vehicles by 2013.
The lead investor is GE, which supplied $15 million through GE Energy Financial Services and GE Capital Equity.
The global market for hybrid gas-electric vehicles in 2008 was slightly more than 500,000 units. Plug-in cars—such as plug-in hybrids and pure electric cars—have yet to be produced beyond a few niche carmakers. Therefore, GE’s total investment in A123Systems—now standing at $70 million—indicates a strong belief in the rapid expansion of hybrid cars in the next three to four years.
The company is also applying for federal and state financing to support its development efforts.
A123 Systems’ customers include several vehicle manufacturers. Chrysler recently chose A123Systems to make batteries for its new line of electric and hybrid cars. Chinese automaker SAIC also selected A123 to produce batteries for its upcoming mild hybrid vehicle. General Motors had considering A123Systems batteries for its plug-in hybrid car, the Chevrolet Volt, but selected LG Chem, a Korean company, instead. A123Systems includes GM, Daimler and Volvo Truck on its customer list.
A123System’s batteries are considered a safer and more durable variation of the lithium ion technology that has become a standard in laptop computers.