A123 bankruptcy spells concern for electric vehicles

Paul Marks, chief technology correspondent
Power loss? A123 powers Drayson's EV racer (Pic: Drayson Racing Technologies)

One of the pioneers of high power, long range electric vehicle batteries, A123 Systems, went bankrupt last week, sending shockwaves through the nascent electric vehicle industry.?"This is a setback for the emerging EV industry, certainly," admits Paul Drayson, a technology entrepreneur and Le Mans racing driver who served as science and innovation minister in Tony Blair's administration.?

His company, Drayson Racing Technologies, is developing an electric racing car that had A123's technology at its heart. And major league motor makers GM and BMW number amongst 123's customers. "A123 was regarded very highly for its excellent cells," says Drayson. "That is why we use their state of the art cells in our EV racing car."

"It shows how tough it is to survive and prosper in the cleantech industry right now and that's a major worry," Drayson told New Scientist. "We need companies like these to succeed if we are going to reduce our reliance on fossil fuels."?

A123's unique selling point is a lithium iron phosphate battery cathode with?a birdcage-like nanostructure. This molecular origami allows lithium ions to enter and exit on charge and discharge without damaging expansion and contraction, so it can cope with 10 times more charge cycles compared to a lithium battery.That innovation attracted $249 million in Department of Energy stimulus funding, some $132 million of which A123 had spent by the time it?filed for bankruptcy protection?last week. The firm hopes to sell its battery assets (two factories in Michigan and one in China) to a rival, Johnson Controls, for less than it's spent in stimulus funds, just $125 million. But with the legal bankruptcy protection process just kicking off it's too early to say what will happen to the firm's product line.What went wrong? It's thought that slow EV sales in the US - only 50,000 electric cars have been sold since 2011 - meant A123 could not meet interest payments on a key credit line. It's probably too early to say if there's a structural problem at the heart of the electric car proposition - though many object to their deferring of emissions from the tailpipe to the power station flue. Others trace A123's problems to an expensive product recall.The DoE, with $2 billion so far bet on getting one million EVs on US roads by 2015, is putting a brave face on it, writing off the bankruptcy as part of the rough and tumble of innovation. "In an emerging industry, it's very common to see some firms consolidate with others as the industry grows and matures," its spokesman wrote in a blogpost.

Source: http://feeds.newscientist.com/c/749/f/10897/s/24c236a2/l/0L0Snewscientist0N0Cblogs0Conepercent0C20A120C10A0Cev0Econcern0Emounts0Eas0Ebattery0Ew0Bhtml0Dcmpid0FRSS0QNSNS0Q20A120EGLOBAL0Qonline0Enews/story01.htm

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