A123 signs with Chrysler and GE

A123’s long-awaited IPO (or APO, actual public offering) could signal an economic recovery spearheaded by electric batteries for vehicle and grid applications.  Chrysler is betting on them for their new EV lineup, and now GE has announced it is deepening its relationship with A123.

The Recovery Act and budget both assert ambitious agendas in the transportation and energy generation sectors.  If these larger investments into electric vehicles and smart grids are going to catch on, A123 will be a company that responds because it is linked to both sectors.

A123 “designs, makes, and sells rechargeable batteries and battery systems used primarily in the electricity and portable power markets. Portable power, for home appliances, power tools, and consumer electronics, makes up a majority of sales but A123 is targeting the fast-growing electric and hybrid electric vehicle market. It also participates with AES to develop multi-megawatt battery systems that would take the fluctuations out of the electricity grid and provide backup power during shortages”.

With that as its product-base, it is easy to see why a company like GE would up their ante into a company like A123.  Chrysler’s interest comes strictly from the transportation angle, developing the electric and hybrid market. GE is among the list of larger, established companies looking to expand into developing smart grids; GE, IBM, Intel, Cisco… With a healthy array also of portable power products, home appliances, and consumer electronics, GE seems to benefit considerably from the arrangement.

Still, the excitement surrounding a company like A123 may give some indication how much interest has developed in the markets for new clean energy offerings.  There has been a considerable lull in IPOs since the markets began their tumble last year.  Much has happened in terms of legislation in the interim, though, and it seems as though the larger Energy Policy that is shaping up will spark a recovery to begin any month now.  How will certain clean sectors fare once the economy begins revving up again?  A123, locked in with GE and Chrysler, seems well positioned to capitalize on many on the broader programs initiated by the Obama Administration.

“The advanced battery market is at a tipping point, and our support of A123 marks the application of GE’s resources at the right time to capture leadership in an essential new field,” said Mark Little, GE’s Senior Vice President and Director GE Global Research.  "GE’s capital, resources and technology expertise will help A123 scale up faster and more efficiently” said GE CEO Jeff Immelt; both concepts, tipping points and efficiency, are part of the Obama Administration’s strategic recovery calculations.

In reference to the call for better efficiency in the transportation sector in America and abroad, Chrysler said in a press release, “This partnership with A123Systems signifies Chrysler's commitment to contribute to our nation's goal of reducing dependence on foreign sources of energy, and reducing greenhouse gas emissions. Chrysler's partnership with A123Systems represents a win-win-win for the American consumer, American manufacturing, and the environment”.  If EVs catch on and actually revolutionize the transportation industry, then the blatant greenwashing of Chrysler’s image can be forgiven.  Still, the idea of an all-American EV is one step closer to a reality.

While companies like GE and Chrysler are still faring the economic storm, they both seem to be eyeing A123 for its significant potential to help them both to be able to hit cruising speed in the relative near-future once the economy is again up-and-running.  According to both GE and Chrysler, A123 figures to be a dominant player in the field of commercializing electrical energy storage in portable applications to vehicles to the grid; and doing that while bringing down overall emissions.  Now, that’s a company whose products and goals are in line with federal policy.

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