Bankrupt Electric Car Battery Maker Sold to Chinese Firm

Energy Secretary Steven Chu (left) and former Michigan Governor Jennifer Granholm (on right) at the opening of A123's facility in Livonia, MI in September 2010 | Photo: Graham Davis/Flickr/Creative Commons License

The saga of struggling electric car battery pack manufacturer A123 seems to have come to an end, as the firm announced Sunday it will sell most of its assets to the Chinese auto parts firm Wanxiang Group for $256.6 million. A123, whose batteries figured prominently in embarrassing fires in electric cars made by the Anaheim-based firm Fisker, had been in negotiation with Wanxiang to set up and investment-based partnership before filing for bankruptcy in October.

Though the negotiations with Wanxiang were well advanced, A123 nonetheless filed for bankruptcy protection after missing a loan payment in October.

According to Ucilia Wang at Forbes, Wanxiang's American subsidiary won the right to buy most of A123's tech and manufacturing plants at an auction held late last week. Among Wanxiang's rivals in the auction was U.S. firm Johnson Controls, which two months ago seemed a sure contender to pick up A123's technology and facilities after a few members of Congress objected to the possibility of a Chinese firm benefiting from a company that had received $132 million in funding from the Department of Energy.

A123 had also received part of a $2 million grant from the California Energy Commission to develop possible grid power storage.

A significant portion of A123's business lay in contracts with the U.S. government, including the Defense Department. A123 will be selling that part of its portfolio to the Illinois-based firm Navitas for just under $2.3 million.

At this writing, it's unknown what the Anaheim-based electric car manufacturer Fisker will do in response to the breakup and sale of A123, but it'll have to get its lithium ion batteries from somewhere. We'lll keep you posted.

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