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A123Systems Awarded $249M Grant from U.S. Department of Energy to Build Advanced Battery Production Facilities in the United States

22nd October 2009

A123 Systems

ES Admin

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A123Systems announced today that it was awarded a $249 million grant from the U.S. Department of Energy’s Electric Drive Vehicle Battery and Component Manufacturing Initiative. Under the terms of the $249 million grant, A123 will be required to match the funds over time as they are used. This grant is an important part of A123’s U.S. manufacturing strategy, which also includes an application for a loan from the Department of Energy’s Advanced Technology Vehicles Manufacturing program. The grant will be used to help implement A123’s strategy for the construction of world-class lithium ion battery manufacturing facilities in the United States, with the first construction location in Livonia, Michigan.

The DOE grant supports A123Systems’ commitment to creating a complete U.S. battery manufacturing industry, keeping each element of the process – intellectual property development, component production and final assembly – in the United States.

“This grant is another exciting step towards creating an American battery infrastructure, which may reduce our dependence on foreign oil and increase our nation’s energy security,” said David Vieau, A123Systems’ president and chief executive officer. “The capital provided by the DOE’s investment will help us speed our growth and better compete in global markets.”

The planned automotive lithium-ion battery manufacturing system is expected to be U.S-based and vertically-integrated. Utilizing Michigan’s talented workforce, it is expected to span the full production process including: research and development, manufacturing of high value components such as A123Systems’ proprietary Nanophosphate™ cathode powder, electrode coating, cell fabrication, module fabrication, through the final assembly of complete battery pack systems ready for vehicle integration.

In January, A123 also submitted an application under the DOE’s Advanced Technology Vehicles Manufacturing (ATVM) Incentive Program for direct loans to further support the manufacturing initiative. The company is continuing to work with the DOE through the ATVM application process.