Energy · Profile from Energy Research Companion
A123 Systems
The Massachusetts battery start-up that took a lithium-iron-phosphate (LFP) cathode out of an MIT laboratory, sold it first in DeWalt power tools, then in hybrid buses, grid storage and the Fisker Karma, raised a celebrated IPO in September 2009 and a ~$249m federal stimulus grant to build North America's largest lithium-ion cell plant in Livonia, Michigan — and went bankrupt three years later. A123 Systems lost the Chevrolet Volt contract to LG Chem (2009), never reached the factory utilisation or cost to compete with Korean and Japanese cell makers, suffered a ~$55m recall in March 2012, and filed for Chapter 11 on 16 October 2012. China's Wanxiang Group, which had agreed to rescue it months earlier, bought its automotive, grid and commercial businesses at auction for ~$256.6m after a US national-security (CFIUS) review, completing in January 2013 (reported). Within a decade, the chemistry A123 had helped commercialise became the world's default for grid storage and much of the EV market — made at enormous scale by CATL and BYD in China. It is the book's case of a technology lead that was not a cost lead.
At a glance
- Founded
- 2001 (reported; incorporation month verify), Watertown, Massachusetts, by Yet-Ming Chiang (MIT materials science professor), Bart Riley and Ric Fulop (reported)
- Headquarters
- Watertown, later Waltham, Massachusetts (to 2013); after the sale, A123 Systems LLC based in Livonia/Novi, Michigan (reported, verify current)
- Ownership / structure
- Venture-backed (investors reported to include Sequoia, North Bridge, GE, Motorola and Qualcomm, verify); Nasdaq: AONE from 24 Sep 2009; Chapter 11 16 Oct 2012 (D. Del.); assets sold to Wanxiang America; the bankrupt estate renamed B456 Systems (reported); A123 Systems LLC a wholly owned Wanxiang subsidiary since 28 Jan 2013
- Leadership
- David Vieau (CEO c. 2002–2012, reported, verify); Jason Forcier (head of automotive, later CEO under Wanxiang, reported, verify); Chiang (co-founder, MIT)
- Segment
- Lithium-ion cells, modules and packs (LFP "Nanophosphate"); transport (hybrid and electric cars, buses, trucks), grid storage (frequency regulation), power tools and commercial uses
- Scale (peak public years)
- Revenue ~$97m (2010) and ~$159m (2011) with net losses ~$153m and ~$258m (reported, verify); ~2,000+ employees (reported, verify); Livonia plant opened Sep 2010 (reported)
- Federal and state support
- ~$249m US DOE ARRA battery-manufacturing grant (Aug 2009; section 22 figure; ~$249.1m reported); Michigan tax credits and incentives (~$100m+, reported, verify)
- Signature moves (incl. failures)
- Founding on nanophosphate LFP (2001); power tools and the LFP patent fight (2005–11); losing the Chevy Volt to LG Chem (2009); IPO and the DOE grant (2009); the Michigan build-out (2010–11); the Fisker recall (2012); Chapter 11 and the Wanxiang auction (2012–13); life under Wanxiang and the NEC storage sale (2014–)
8 strategic moves analysed
Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.
2001
Founding and Nanophosphate LFP
Founding / technology bet
2006
Power Tools and the LFP Patent Fight
Offtake or supply contract / regulatory or legal action
2009
IPO and the DOE Grant
Spin-off or IPO / financing (state support)
2009
Losing the Chevy Volt to LG Chem
Offtake or supply contract — lost (failure)
2010
Michigan Gigafactory Build Out
Construction or commissioning / capacity bet — failure
2012
Chapter 11 and the Wanxiang Auction
Restructuring or bankruptcy / sale / regulatory review (CFIUS)
2012
Fisker Recall
Quality failure / product recall
2014
Life Under Wanxiang and the NEC Storage Sale
Divestment / strategy pivot / survival