Electric Cars “Not Viable Markets” For Reborn A123 In U.S., Europe In Next 10 Years, CEO SaysElectric Cars “Not Viable Markets” For Reborn A123 In U.S., Europe In Next 10 Years, CEO Says

The story of lithium-ion cell maker A123 Systems seems to sprout more irony by the day.
A123 was once enthusiastic about electric cars, supplying batteries for the 2012 Fisker Karma.
Then a recall drove A123 into bankruptcy; soon Fisker Automotive followed it.
SEE ALSO: Owners Of ‘New Fisker’ Offer Selective Electric-Car History (Mar 2014)
Now, both companies are now owned by Chinese automotive supplier Wanxiang, but they appear to be going in separate directions.
While Wanxiang is still working to relaunch the Karma, under the new Elux brand name, A123 is moving away from electric cars–in the U.S. at least.
2012 Fisker Karma from the Rogers’ Classic Car Museum collection
The company will focus on lithium-ion starter batteries rather than battery packs for electric cars, CEO Jason Forcier said in a recent interview with Automotive News (subscription required).
“Microhybrids,” not electric cars
While A123 still produces electric-car battery packs in China, he said the company doesn’t view the U.S. and Europe as viable electric-car battery markets for at least the next 10 years.
MORE: Chinese Group Approved To Buy Ailing A123 Systems Battery Firm (Jan 2013)
Instead, the company’s two Detroit-area factories are producing lithium-ion starter batteries for Mercedes-Benz.
Lithium-ion batteries are still up to three times more expensive than traditional lead-acid batteries, but carmakers are interested in them because of their light weight.
Forcier also expects to begin production of batteries for “microhybrid” powertrains beginning in 2017 or 2018.
A123 Systems Prismatic Cell
Expanded start-stop systems that keep auxiliary power flowing to the vehicle offer a cost-effective compromise between regular internal-combustion engines and full hybrid systems, say some analysts, letting automakers boost fuel economy ratings at minimal cost.
The idea is to use start-stop systems and regenerative braking to take more load off the engine, without the added cost of a full hybrid powertrain.
Today, though, about one fourth of A123’s revenue still comes from battery packs for electric cars.
RELATED: Fisker To Be Renamed Elux, New Karma Not On Sale Before Next Year
The company runs a factory in Hangzhou, China, that produces battery packs for the domestic market there.
Past troubles with Fisker
A123 doesn’t appear eager to revisit its last foray into the U.S. electric-car market, though.
Its troubles began when Fisker–then its largest automotive customer–delayed putting its Karma range-extended electric luxury sedan into production in 2011.
That drastically lowered the projected demand for A123 cells.
Shortly after the Fisker Karma finally staggered into production in 2012, A123 had to recall every Karma battery pack it had built due to problems at its Livonia, Michigan, plant.
A123 Systems manufacturing facility, Livonia, Michigan
It entered bankruptcy soon after. And that left Fisker with defective batteries that were to blame for some of the Karma’s well-publicized quality issues.
Some inside the carmaker blamed this–and the subsequent supply cutoff owing to the A123 shutdown–for Fisker’s eventual bankruptcy.
Despite that turbulent history, A123 and Fisker are now owned by the same company.
So is there really no chance of a second collaboration between the two companies?
“I’d love to have them as a customer,” CEO Forcier said.
But he noted that support for Fisker nonetheless “doesn’t mean they have to use our battery.”
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