A123 Systems to Double Global Manufacturing Capacity

JUN 15 2015 BY MARK KANE 9

Livonia, Mich Manufacturing Facility

Livonia, Mich Manufacturing Facility

A123 Systems announced plans of expanding its global manufacturing capacity to 1.5 GWh within the next 3 years.

That means double the current output of three manufacturing hubs in the state of Michigan, Hangzhou, China and Changzhou, China, which are running at full utilization right now.

Good to hear that A123 Systems, after years of struggles, finally finds a lot of demand for its lithium-ion batteries.

The company intends to spend more than $200 million on new manufacturing capacity.

“While the company is currently in the midst of a $100 Million capital expansion across its manufacturing network, A123 has recognized that the existing investment plan must be substantially expanded to satisfy much stronger market demand for its products. In fact, the company currently forecasts growth of more than 50% this year.

The new investment program of an additional $200+ Million will be installed in phases over the next three years, with additional investments anticipated as target markets further develop. The additional capacity is planned to support a variety of applications and new customer programs across the globe including low voltage hybrids, plug-in passenger vehicles and several commercial vehicle programs. These programs collectively draw upon A123’s expanding product portfolio which offers multiple lithium-ion chemistries and cell designs optimized for different applications.”

Jason Forcier, CEO said:

“The strength of A123 has never been greater and we are honored to be expanding our existing customer relationships and establishing new ones at the same time.”

Demand for more batteries comes from different applications:

“While A123 currently sees broad demand across its target markets, key new business wins have also validated the company’s strategy. In the field of low voltage hybrids, not only is the 12V starter battery product line continuing to expand but A123 has also received multiple production awards for 48V micro-hybrid applications. In China, the company is quickly capitalizing on the remarkable growth of plug-in vehicles in both the passenger vehicle and bus segments. These successes are driving additional R&D in high energy and power cell designs which will enter the market in the coming years.”

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9 Comments on "A123 Systems to Double Global Manufacturing Capacity"

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So both A123 and LG Chem have battery facilities in Michigan, and A123’s is already operating at maximum capacity?

That’s interesting to me, where is all the A123 battery business coming from?

Don’t get me wrong, it’s exciting to hear, I just want to know more of the details behind it. 🙂

Where is all the A123 battery business coming from?

That’s a good question. Looking over A123’s press releases for the past year, they’re awfully long on claiming they’ve developed new products and changed focus after divesting themselves of some divisions (amazing how marketing can make a negative sound like a positive, innit?), but not a word about any new customers.

Wikipedia is no help; that article essentially hasn’t been updated since A123’s bankruptcy.

Interesting, yet they say the factory is at full capacity. I wonder where the truth really lies?

I really want to believe it, I love the idea of growing and successful battery manufacturing domestically. It just doesn’t seem to match up with the facts.

They do mention a lot of interest in 12V batteries using lithium, maybe they’re pumping those out for golf carts or something?

Maybe they are trying EVs again, 0.75GWh should be enough for almost 9,000 Teslas/ 32,000 Leafs a year. Or they are trying stationary batteries, they could build 1875 power pack like storage, a year. Or maybe they want to supply 10 million smartphone batteries. That would be almost a seventh of last quarters iPhone sales. What I want to say is: the amount of storage they sell is not very much.

So who are they selling batteries to?

Yeah, manufactured batteries have to go somewhere — this ain’t Internet New Economy stuff.
Vehicle manufacturers can’t (and have no reason to) hide the source of their batteries once deals are inked and specs are out… I’ll believe A123 is selling a significant amount of batteries when I see an auto vendor say so.

The 12 volt starter batteries were first mentioned on this site a month ago:

No car manufacturer will use them without extensive testing. If they work well we could be seeing them in expensive cars in a few years.

That’s just a potential (small) future market. no actual contract or customer mentioned.

A123 story? Is this the year 2010?