A123 Auction Underway As Four Bidders Emerge While Fisker Waits

2 years ago by Jay Cole 21

"Ok, So I Guess I'll Just Wait Here Then?"

At least four companies have qualified to bid on the assets of now bankrupt US battery maker A123, one of which is the somewhat-controversial Wanxiang Group Corp of China, whom some US legislators want to block from the process.

Interestingly, NEC who has a near half ownership in AESC along with Nissan, and who is the manufacturer of the current battery found inside the Nissan LEAF has joined into bidding war.   Rounding out the group is Johnson Controls Inc., and Siemens AG of Germany.

Who Needs A Thermal Battery System When You Have Results Like This? (Click To Enlarge)

A123 had hoped to go into production of a disruptive new battery technology (EXT) in the first half of 2013 that saw a 90% pack retention rate over 2,000 cycles, and a 90% retention rate after 700 cycles at a blistering 167 degrees Fahrenheit.

Additionally, these EXT cells performed extremely well at 0F, a traditional Achilles heel of the lithium battery.  Both of these exception hot and cold characteristics could give any potential buyer a leg up in getting to market first with the next best thing in battery tech.

Unfortunately for A123, a lack of demand coupled with a slow roll out of the Fisker Karma, as well as a costly recall on some defective Karma packs that were improperly welded caused A123 to bleed cash before it could get to market and generate a steady revenue stream.

It appears that A123′s proprietary value is truly being appreciated only after its demise.

The auction was scheduled to start Thursday morning at 10am in Chicago  (at the law offices of Latham & Watkins), but reports surfaced that the parties were held up reviewing contracts and other details.

“It’s not like we’re bidding on gas stations,” said a person familiar with the auction.

2014 Spark EV Will Have Packs Supplied By The Winner Of A123's Automotive Assets

With other smaller interests also said to be looking at acquiring some of A123′s lesser pieces, Bojan Guzina, an attorney representing Wanxiang said the auction could run into next week.

Meanwhile, Fisker has not been receiving batteries from A123 since the bankruptcy announcement and has been forced to idle its Karma production line in Finland for over a month already while they wait on the result.

Fisker CEO Tony Posawatz has said that the company is down to their last 100 packs which are being retained for service and repairs.

Even if the auction is tied up quickly, there is no guarantee their supply chain will be made whole, as A123 (and its bidders) are looking to rid themselves of the supply contract with Fisker by asking the bankruptcy judge to void the contract because it is “below market” value, and as such can be vacated under Chapter 11.

We suspect Fisker has already started to work on sourcing lithium battery packs from another supplier…just in case.

Reuters

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21 responses to "A123 Auction Underway As Four Bidders Emerge While Fisker Waits"

  1. Schmeltz says:

    I wonder what the chances are of Fisker switching to LG batteries vs. A123 or any other maker? They have Tony Posawatz at Fisker now with experience with LG cells, and both GM and Ford are already using LG for their own PHEV’s. I would say at least for the Atlantic, we will probably see LG batteries or even some other brand in those cars in the near future. Fisker is probably learning quickly to go with a track record instead of a sales pitch.

    1. GeorgeS says:

      The more the better, we need the US LG chem plant up and running.

      1. James says:

        Hear! Hear! Let’s put those LG Chem workers in Michigan on
        the job!

  2. GeorgeS says:

    Jay quote:
    “Interestingly, NEC who has a near half ownership in AESC along with Nissan, and who is the manufacturer of the current battery found inside the Nissan LEAF has joined into bidding war.”

    A123′s robust battery chemistry would be a nearly perfect “fix” for Nissans battery degradation heat issue. No cooling system req’d. just slap em in.

    1. evnow says:

      There is more to a battery than thermal characteristics – like energy density, for eg.

  3. GeorgeS says:

    Article quote:
    “With other smaller interests also said to be looking at acquiring some of A123′s lesser pieces,”

    Jay question: So does this mean they can bust up the company into smaller pieces based on battery chemistry??”

    I thought it would be winner take all.

    1. Jay Cole says:

      It remains to be seen how it all shakes out, but yes they are auctioning it off piecemeal where they can ie) automotive assets, grid business, etc. That being said, someone could offer a comprehensive offer which could be accepted over the sum of the parts.

  4. Nelson says:

    I’m surprised GM hasn’t joined in the bidding war. If they acquired A123 with EXT chemistry, many possibilities would exist.
    They could manufacture their own cells.
    They could negotiate better cell prices from LG.
    They could supply EXT chemistry to LG for exclusive US cell manufacturing.

    NPNS!
    Volt#671

    1. ClarksonCote says:

      Agree!!

    2. KenZ says:

      I think we’d need to see the details behind the tech that Jay was not able to note (likely because no one knows yet…). Things like…. what is the specific energy (Wh/kg) of this allegedly ground breaking EXT? What is the $/Wh? If these two are not also competitive, then one can get “improved” results from current Li-ion tech, just don’t use as much of the capacity in its early life (charge to 85%, discharge to 30%, and increase the top end charge range as the battery pack starts to degrade… thus it appears that your battery is not degrading at all. This is significantly different than the EXT, but to the consumer it’s the same, and if it costs the manufacturer less, and weighs less per utilized kWh….). Having worked for a company that evaluated the phosphates, there are lots of pluses to what A123 was doing, but specific energy was not one of them.

      1. KenZ says:

        Sorry, just to be a bit more clear unless that was confusing… the graph that Jay posts for the A123 vs. competitor is impressive at first, but… it’s graphing % capacity degradation. This is a bit misleading when comparing to “standard” li-ion cells for two fundamental reasons. The first is that they’re not graphing actual capacity, or specific capacity (Ah/kg)… I can promise you that with NMC, if you did that comparison, the competitor cells would degrade at the same rate shown, but start a heck of a lot higher, leaving the question… when’s the crossover/break even point when the A123 cells would actually drive your car further? One year? Three years?

        But even that isn’t good enough, because Ah don’t drive your car, Wh drive your car. Wh=Ah*V. And A123′s phosphates also have a lower cell voltage than NMC and other more standard cells.

        Summary: show me a graph where instead of %Ah on the Y axis, it’s Wh/kg on the Y axis, and then you’ll know if it’s a worthwhile technology. Until you see that data, the graph is merely a marketing curiosity. (Jay- no criticism intended on the news, just noting for the non-battery types)

        1. Jay Cole says:

          No worries KenZ. In fact happy to have someone illustrate all those valid unknowns. I can’t really get that deep into the battery nuances in this kind of article…otherwise maybe only 100 readers would not fall unconscious before they got to the end, (=

          Only thing I can really answer on your questions is that A123 at time of press was saying that the $/Wh was close to their traditional LiFePO4s.

          To me the issue would be the Wh/kg, because as we move forward and prices come down that is going to be the play(imo). That is where NMC I think really has an advantage…and AESC out of Zama is already running a ppd line. Seems like your lookng at about 60-65% weight savings.

          I guess we will get an idea of the value of A123 automotive tech when we see what price gets paid for it. The fact NEC showed up to me was what I really found interesting.

  5. Scott says:

    Auction start 10AM, not PM.

    1. Jay Cole says:

      “…was scheduled to start Thursday morning at 10pm”

      I was just checking to see if anyone was paying attention. You get the blue ribbon, (=

      1. Schmeltz says:

        It’s OK Jay…It’s 10:00 somewhere. ;)

  6. James says:

    Jay, my man! – Today you had to spend AT LEAST as much time
    writing the article and collecting the data as you did finding
    the picture of Henrik ….waiting….

    As usual, you’ve outdone yourself! I laughed out loud! :)

    1. Jay Cole says:

      Is it wrong that I think I am starting to enjoy uploading pictures more than writing about EVs?

      (btw, the Fisker shot is actually from a photo shot for selling watches)

      My personal fav is a staff piece I hijacked the lead picture for here and replaced it with this actual screencap from a poorly translated Japanese Mitsubishi i-MiEV film:

      null

      …i don’t know why, maybe I have been doing this too long, but this amuses me to no end

      1. James says:

        LOL! “The Mistubishi Dream Maker” would’ve been better than “i” me thinks.

        OK….Maybe not.

  7. James says:

    A big takeaway from this article has to be: CAN FISKER SURVIVE?

    We can hope an LG pack could make it’s way into Karmas, but
    that’s unlikey in any realistic timeframe to keep Fisker solvent.
    With only 100 packs left, Fisker is in deep doo doo! Designing
    anew what may be the most important single piece of the
    entire car could sink the company.

    If one company, say Johnson Controls – purchases the lion’s
    share of A123, how long would it be before new packs could
    be built and shipped? If not ( Johnson Control’s new agreement
    with the Argonne-hub project may mean they don’t need
    A123′s proprietary technology ) are they sunk? NEC’s interest
    may mean there was more “under the hood” at A123 than
    some might think….

  8. James says:

    The picture of the Mitsu “i” makes me wonder whatever
    happened to the SCiB announcement? Awhile back
    Mitsubishi announced it would be replacing it’s own
    packs in the iMiev and it’s EV taxi with Toshiba’s SCiB
    batteries which claim improvement in nearly every
    category over it’s rival technologies.

    So far, the only EV I’ve seen with SCiB batteries was
    the Schwinn Tailwind electric bicycle – and it was
    discontinued ( cost? It was one ‘spensive bike! )…
    While I read years back that VW and others would
    employ Toshiba’s batteries…There has been no
    supporting news of such lately.

    1. Ambulator says:

      I believe the Honda Fit EV is supposed to be using SCiB batteries.