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A123Systems Announces Plan To Build U.S.-based Lithium Ion Battery Mass Production Facilities

January 11, 2009 by Jeff Shepard

A123Systems announced that it has submitted an application under the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing Incentive Program to qualify for $1.84 billion in direct loans to support the construction of new world-class lithium ion battery manufacturing facilities in the United States, with the first construction location in southeast Michigan.

If A123’s application is approved, this program would enable the company to dramatically expand production capacity in the United States, with full production volumes designed to supply battery systems for five million hybrid vehicles or half a million plug-in electric vehicles per year by 2013.

"We’re entering an exciting new phase for the automotive industry where we increase the electrification of vehicles, reducing consumption of gasoline through advanced batteries. This new facility would greatly accelerate this change and help ensure that the American economy replaces its dependence on foreign oil with reliance on advanced, homegrown batteries," said David Vieau, A123Systems President and Chief Executive Officer.

At full operation, A123 expects the combined plants would occupy as much as 7 million square feet and create over 14,000 jobs. These plants would produce battery cells and systems to meet the needs of A123’s automotive customer portfolio, which currently includes over seven vehicle manufacturers and 19 vehicle models ranging from HEVs (hybrid electric vehicles) to EVs (electric vehicles).

"Chrysler’s commitment to E-drive industry leadership has led us to a strategic relationship with US-based A123Systems as one of our key suppliers supporting production development of ENVI electric vehicles. Chrysler strongly encourages the efforts of A123Systems to develop and mass produce energy storage systems in the United States" said Lou Rhodes, VP of Advanced Engineering for Chrysler LLC and President of ENVI.

"At GM, we see the development of vehicles powered by electricity as key to the transformation of our industry. And advanced battery technology, is at the heart of this transformation," said Bob Lutz, GM Vice Chairman of Global Product Development. "A123’s proposal to manufacture advanced battery cells and packs right here in the United States is a positive development for our industry and the nation."

"At Project Better Place, we truly believe that there is a path forward for the US to lead the world into a 21st sustainable century led by American innovation. Converting our national fleet of cars from fossil fuel dependent to fully electric revives our core industrial power, addresses key national strategic goals, and starts to address the biggest global risk we have – climate change. It represents a historic opportunity for the US to re-engineer its economy and its global reputation. We look forward to leading the transformation to sustainable mobility with partners like A123 as part of our mission to end the world’s addiction to foreign oil," said Shai Agassi, Founder and CEO of Better Place.