Analysis

A123 Systems and SAIC Motor Form Joint Venture to Tap Growing Chinese Market for Hybrid Electric and Pure Electric Vehicles

22nd December 2009
ES Admin
A123 Systems a developer and manufacturer of advanced Nanophosphate lithium ion batteries and systems, today announced that they are entering into a joint venture with SAIC Motor Co. Ltd, a leading automaker in China. The focus of the joint venture is to develop, manufacture and sell complete vehicle traction battery systems for use in hybrid electric and pure electric passenger vehicles and heavy duty truck and bus applications in the People's Republic of China, the largest and fastest growing automotive market in the world.
We are excited to be partnering with an industry leader such as SAIC Motor to pursue the expanding Chinese market for advanced lithium ion battery technology, said David Vieau, chief executive officer of A123 Systems. As part of this partnership we look forward to building a team of outstanding employees to develop innovative battery technologies that we expect will be included in some of the highest quality hybrid and electric vehicles anywhere in the world.



The new venture, called Shanghai Advanced Traction Battery Systems Co. (ATBS), will seek to develop business throughout the entire Chinese transportation market and position A123 to strategically gain market share. ATBS will also be the preferential supplier of complete energy storage systems for all hybrid electric and pure electric vehicles manufactured by SAIC Motor and its wholly-owned subsidiaries. A123 Systems will supply the advanced automotive battery cells and work with SAIC Motor to design and develop the integrated battery systems for ATBS.



The venture's ownership will be held 51 percent by SAIC Motor and 49 percent by A123 Systems, with the management duties of the venture being shared equally between the parties.



In concert with this agreement, ATBS has been awarded a contract to supply battery systems for SAIC Motor's plug-in hybrid vehicle program. This program seeks to develop a plug-in hybrid vehicle that meets the growing demand for alternative-energy transportation in China.



SAIC Motor is also developing a broad overall portfolio of new energy vehicles. SAIC Motor previously disclosed plans for a hybrid Roewe 750 sedan and a plug-in hybrid version of the Roewe 550, which could cut fuel consumption by 20 percent and 50 percent respectively, in addition to plans for introducing electric vehicles on the market in 2012. The Roewe 550 and 750 will utilize A123 battery cells.

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