Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – A123Systems Inc., a relatively unknown, privately owned developer of lithium-ion batteries, is poised to play a major role in the emerging market for plug-in electric vehicles and those powered by fuel cells.

General Motors Corp. Vice Chairman Bob Lutz reveals at the Management Briefing Seminars here A123Systems and GM will co-develop advanced Li-ion cells for GM’s E-Flex vehicles, beginning with the Chevrolet Volt.

A123Systems CEO David Vieau says the companies will focus on nanophosphate battery chemistry, which he says lasts longer and is safer and more powerful than currently available Li-ion batteries, which the company continues to manufacture.

“We’re riding two horses – two chemistries,” Vieau tells reporters.

Battery packs using the new proprietary chemistry, which is licensed by the Massachusetts Institute of Technology, will last 10 years and cover 7,000 recharging cycles. By contrast, Li-ion batteries in a typical laptop computer only last through 500 cycles, Vieau says.

A123Systems earlier this year was awarded a Chevy Volt development contract by GM to supply its existing Li-ion batteries, in collaboration with Germany’s Continental AG as the system integrator.

GM awarded a similar contract to Compact Power Inc., a unit of South Korea’s LG Chem, and has a development contract with Cobasys LLC, a 50/50 joint venture with Energy Conversion Devices Inc. and Chevron Technology Ventures LLC, for the Saturn Vue hybrid.

Vieau says cells using nanophosphate technology will be shaped differently than current batteries, which typically look like standard D-size cells found in most applications.

“They will probably be flat and rectangular to fit better in the vehicle,” he says.

Founded 5-1/2 years ago, A123Systems currently manufactures Li-ion batteries “by the millions” in China for a variety of applications including power tools, he says.

High-volume production in North America is forecast for late 2008.

A123System’s capability of manufacturing the batteries in large volumes is one reason why GM was interested, Vieau says.