The federal government has set very aggressive goals for the sale of plug-in electric vehicles. To aid the sale of these vehicles the Feds provided a $249 million grant to lithium-ion battery manufacturer A123 Systems. President Obama congratulated A123 workers via video conference as the company ramped up production at its Michigan plant. Now A123’s future is in jeopardy, telling the Securities and Exchange Commission that the company has only five months of cash left.
The Department of Transportation has predicted one million electric vehicles will be on U.S. highways by 2015. The government has loaned or provided grants of taxpayer dollars to several electric car makers like Fisker and to battery makers like A123 with the million unit goal in mind. Despite tax credits and other inducements consumers have not been sparked into buying electric vehicles. Researchers now estimate the number of electric vehicles to be sold by 2015 will likely be in the 410K range.
A123 supplies the batteries that power the Fisker Karma. Both companies were embarrassed when a Karma famously ‘died’ during an evaluation by Consumer Reports. As a result A123 issued a recall for its lithium-ion batteries costing the company over $60 million.
The new Chevrolet all-electric Spark will also use batteries supplied by A123 when it debuts in 2013.