Back in January, A123 was disappointed when GM chose its rival, LG Chemicals, to manufacture lithium-ion batteries for the Chevy Volt. But this week they announced a deal with Chrysler, which means that they will finally get to make batteries for EVs and not just power tools (not that I’ve got anything against greener power tools).
That is, of course, as long as Chrysler survives long enough. Chrysler is kind of like the last kid to get picked for dodgeball right now – they are in deep financial trouble. Last week President Obama wagged a finger in their direction and suggested they seek a merger with Fiat to save them from fading away entirely.
But if they do manage to pull through, Chrysler will be a great partner for A123. Chrysler is planning a number of electric vehicles, such as the Dodge Circuit and the 200C – all electric EVs – as well as plug-in hybrid versions of the Jeep Wrangler and the Town & Country minivan.
A123, if you recall, makes batteries that are flat, rather than cylindrical like many of their competitors. This allows the batteries to fit under the car, taking up less space, but it also reduces the energy density that they can hold. In other words, A123’s batteries might allow a car to look sleeker, but they would need to prove themselves in the performance category.
A123 also wants to build a huge battery factor in Michigan – big enough to make millions of plug in hybrids over the next few years. They have applied for grants, since about $25 billion of stimulus money has been set aside for electric vehicle research and development.
What’s kind of interesting about this story is that it seems to be more about A123 than Chrysler. Electric vehicles are and will be all about the batteries inside of them, so this is A123’s chance to show the world whether its unconventional batteries are as good as they claim, or just a flop.
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