Two local battery makers, A123 Systems LLC and Boston-Power Inc., are playing key roles in an increasingly high stakes bidding war for a bankrupt hybrid carmaker scheduled to be auctioned Wednesday.
The auction for Fisker Automotive pits A123’s owner, the US subsidiary of China’s Wanxiang Group, against another firm, Hybrid Tech Holdings LLC, which has partnered with Boston-Power of Westborough as a potential battery supplier to a resurrected Fisker. The outcome of the auction could mean additional growth for the battery maker on the winning team by providing a ready-made customer — though any real payoff from that relationship could be years off, analysts said.
“Fisker’s original sales were poor,” said Cosmin Laslau, an analyst for energy storage at Lux Research in Boston. “Fisker’s new owners may have to wait a very long time to see a return on their investment.”
Fisker, a California company best known for its Karma plug-in hybrid, filed for bankruptcy in November. Once regarded as a promising company, it was awarded a $529 million government loan, although less than $200 million was paid out. The loan was suspended after Fisker failed to meet production and sales goals.
Hybrid Tech, a group led by Hong Kong billionaire Richard Li, was the first to make an offer to buy Fisker out of bankruptcy. But a few days before the bankruptcy court was expected to approve that deal, Wanxiang jumped in, leading the bankruptcy court to schedule an auction. It is now offering $44.4 million plus a 20 percent stake for creditors in the reorganized company. Hybrid Tech responded with a $56.9 million bid.
Both bidders have connections to Fisker. Li was an original investor in the car maker. A123 supplied batteries for the Karma — though the relationship was not always smooth. When Fisker cut back on production and slashed its battery orders in late 2011, it dealt a blow to A123 that contributed to its eventual bankruptcy. Soon after, a product defect forced A123 to recall many of its batteries, including some installed in Karmas.
A123 filed for bankruptcy in 2012. Wanxiang, an auto parts conglomerate, bought the Waltham company in an auction.
Since the battery is such a big component of any hybrid car, lining up a supplier is a must for any firm hoping to bring Fisker out of bankruptcy, said Laslau, the Lux analyst. That’s why Hybrid Tech unveiled its partnership with Boston-Power last week, he said
“For any bid to make sense, the bidder has to come in and say, here’s how we’ll deal with this [battery supply] problem,” Laslau said.
Boston-Power is perhaps best known for making batteries that power Hewlett-Packard laptops, but it said it is confident it can compete in the automotive market.
“Like our new partners, we believe Fisker has a bright and continued future in the US,” Richard Chamberlain, Boston-Power’s chief technology officer, said in the statement. “We feel strongly that together with Hybrid, our . . . products will help ensure the future success of Fisker, of the Karma, and forthcoming Atlantic vehicles.”
The Fisker Atlantic is a mid-size car that never went into production.
But A123’s previous history of supplying batteries to Fisker could give Wanxiang an advantage, said Sunni Beville, a lawyer at the Boston firm Brown Rudnick, which is representing creditors.
“We’re obviously pleased with the competition between the two bidders and we’re looking forward to the auction,” said Beville. “At the moment, we haven’t determined which creditors prefer.”
Pin Ni, head of Wanxiang America, downplayed any advantages his company might have in the auction. “We always respect any competitor,” Ni said.