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Battery Cell Maker A123 Gets More Time To Use DoE Grant Funds

 
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Lithium Ion Phosphate Auto Battery cell

Lithium Ion Phosphate Auto Battery cell

This is a tough time for lithium-ion cell maker A123 Systems, but the company did get one little piece of good news yesterday.

The U.S. Department of Energy has agreed to lengthen the time period over which A123 can use funds from a $249.1 million grant it received from the DoE in August 2009 to build a lithium-ion cell fabrication plant in  Livonia, Michigan.

The funds can now be used any time through December 2014. Per the terms of the original grant, A123 must match DoE grant dollars with its own funds to draw against them.

According to an SEC Filing, A123 [NSDQ:AONE] said it has thus far drawn $127 million of the grant funds.

Today being Friday the 13th, however, it seems to be a fitting time to recount all the not-so-good news made by A123 of late, starting with the most recent.

  • Yesterday, A123 cells were tapped as the cause of an explosion at GM's battery lab in Warren, Michigan, which injured one and left the lab closed
  • In March, A123 recalled lithium-ion cells made in the Livonia plant due to a manufacturing flaw--meaning every 2012 Fisker Karma built so far will get a new battery pack
  • Last year, its major automotive customer, Fisker, cut orders for A123 cells due to delays in launching its Karma range-extended electric car; A123 had to lay off employees

A123 Systems share price for year up to April 13, 2012 [Google Finance]

A123 Systems share price for year up to April 13, 2012 [Google Finance]

Enlarge Photo

The company's stock opened this morning at $0.95, after briefly falling below $0.90 yesterday as news of the battery lab implications came out. A year ago, the stock was worth approximately $6 a share.

Oh, and A123 is also now facing a class-action lawsuit on behalf of shareholders who bought its stock between February 28, 2011 and March 23, 2012.

We hope A123 execs can treat themselves to a stiff adult beverage this evening as this Friday the 13th winds to a close.

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Comments (4)
  1. Having participated in a class action lawsuit against Tyco, I can relate that the process takes forever, usually results in miniscule recoveries, and makes the law firms rather wealthy. Its obvious that politicians (read : lawyers) wrote the terms of class action lawsuits.
     
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  2. Wow, that class action lawsuit is frivolous and should not be given a moments serious consideration. They are claiming that A123 knew about the battery defect, before they were made, and deliberately concealed this from the stockholders. If A123 had known about it they would have fixed it!
     
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  3. A123 does not deserve this bad rap. The explosion at GM labs was stressing the battery to extreme conditions in order to find its failing point. This is NOT a fault of A123. The fact that the lab had blast doors on it proves they knew what they were doing was dangerous.

    Why is Green Car Reports trying to make this incident into a negative news item for A123?
     
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  4. @Roy: Green Car Reports isn't trying to do anything of the sort.

    We reported the news items above (not only the explosion at the GM lab but the other items listed as well) because they are a major factor in the market price of A123's stock (take a look at the dip on A123's chart). That one item was only one of several unfortunate news items from and about the company over the last year. As noted in the piece above.
     
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