Breakthrough buoys battery firm A123 Systems
Lighter, cheaper devices could prove salvation for struggling company
Advanced battery maker A123 Systems Inc. is set on Tuesday to unveil a new technology that the Waltham firm says would allow batteries used in hybrid and electric vehicles to work at extreme temperatures, a breakthrough that could dramatically cut production costs and lower battery prices.
The announcement comes as A123 struggles from a recent recall of defective batteries, a cut in orders from one of its largest customers, and concerns it disclosed in financial filings about its ability to raise enough cash to meet operating needs. A123’s stock, which peaked above $25 a share in 2009, closed at $1.03 a share on Monday.
Chief executive David Vieau said the new technology could be a game changer for the electric vehicle and telecommunications markets, as well as his company. Until now, many lithium ion batteries made by A123 and other manufacturers needed separate heating and cooling systems to operate in extreme temperatures.
Eliminating the need for these systems would make batteries lighter, cheaper, and more competitive with traditional lead acid batteries. A123 estimates its new generation batteries, called Nanophosphate EXT, are about half the weight of traditional batteries, charge several times more quickly, and last longer.
“If you can eliminate the weight of the cooling [system] and the costs,” Vieau said, “you get cars that go a lot faster. You make batteries that last a little longer.”
A123 said it also plans to market its improved batteries as backup systems for cell towers, and expects to ramp up production of the batteries in the first half of next year.
Kevin See, lead analyst for the electric vehicles service at Lux Research Inc. in Boston, said it is hard to tell just how much A123’s advances in battery technology will help the firm. A large part of the problem, he said, is lithium ion batteries can cost three to five times as much as traditional ones. “Nobody is going to argue that lithium ion can do more than lead acid does, but does it do enough to justify the increased costs?” See said. “Is that benefit going to be big enough for an automaker to go from a cheap lead-acid battery to a significantly more expensive lithium ion battery?”
A123 has been one of the state’s most promising alternative energy firms, getting nearly $250 million from the federal government to build a manufacturing plant in Michigan. But it has not turned a profit since it began selling stock to the public in 2009. Late last year, Fisker Automotive, an Anaheim, Calif., electric vehicle maker, cut its orders for A123 batteries after saying it would build fewer cars.
The company took another hit after finding a component misaligned in some of its automotive batteries and estimates it will spend about $55 million to fix those defects.
A123 has been testing its Nanophosphate EXT technology against lead acid batteries at the Center for Automotive Research at Ohio State University. Researchers there said the batteries performed impressively at high temperatures without losing storage and power generating capabilities.
If continued testing shows similar results, said Yann Guezennec, a senior fellow at the center, “we believe Nanophosphate EXT could be a game-changing battery breakthrough for the electrification of transportation.”
Brian Warshay, a research associate in Lux Research’s New York office, said A123’s lab results look promising, but new technology often needs additional testing. “There’s not always a direct translation from the lab to real world applications,” he said.
Erin Ailworth can be reached at firstname.lastname@example.org.