Battery maker A123 sees slower demand
Reuters reported that A123 Systems which develops and builds advanced battery systems posted a deeper Q3 loss and warned that automakers were moving more slowly on electric car projects sending its shares tumbling.
The Watertown, Massachusetts based company cautioned that an increase in sales from electric car related projects it had told investors to expect would be delayed by about half a year until the Q2 of 2011.
Mr David Vieau CEO of A123 said that the battery pack for the 2012 model year vehicle will be developed by JV between the 2 companies and the cells will be shipped to China. A123 already has a contract to supply batteries to SAIC for a hybrid and a plug in hybrid vehicle.
A123, which had its initial public offering in September 2009, posted a net loss of USD 43.7 million or 42 cents per share compared with a loss of USD 22.8 million a year earlier. Revenue rose 11% to USD 26.2 million.
Operating expenses almost doubled to USD 41 million as the company incurred costs to open a battery plant in Livonia, Michigan that was also funded by USD 249 million grants from the US Department of Energy. The plant is part of a plan by A123 to double its lithium ion battery production capacity by the end of 2010. A123 has been named a battery supplier for BMW and plug in hybrid developer Fisker Automotive.
Mr David Vieau said that the company has made progress in a development deal with a major automaker that he expected would lead to a production contract. The vehicle under development would be a pure EV powered by A123 batteries. A123 had previously forecast that Q4 2010 revenue would jump to around USD 45 million up from the average of USD 23 million in the previous Q3.
He said that we said previously we really thought that the Q4 was when some of these new automotive programs would start to kick in. Based on the customer ramp up, it looks like that's going to shift to the Q2. So it's about a 6 month slowdown that we're having.
(Sourced from Reuters)Battery maker A123 sees slower demandBattery maker A123 seesslowerdemand