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A123 Systems banking on new battery tech

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The startup says an improved version of its lithium-ion battery cell technology could lead to lighter, longer-lasting battery packs that will lower the cost of electric vehicles.

A123 Systems says an improved version of its lithium-ion battery cell technology, which was unveiled today, could lead to lighter, longer-lasting battery packs that won't require heating or cooling systems and ultimately, will lower the cost of electric vehicles.

A123, which supplies batteries to Fisker Automotive and GM's Spark electric car, has struggled considerably in recent months to keep manufacturing costs in line and remain competitive.

A tepid U.S. electric car market hasn't helped. For instance, combined sales of the Chevrolet Volt and Nissan Leaf from January through April 2012 didn't reach the 10,000 mark. And A123, which posted sharply lower revenues and losses for the first quarter of the year, has had to finance a recall program to replace batteries with defective cells. These problems led A123 to issue last month a going concern warning, which pushed share prices down sharply.

A123 is counting on this latest tweak to its technology, called the Nanophosphate EXT, to revive its existing business and open up potential new applications for lithium-ion cells in the telecommunications and transportation industries.

A123's new battery could be used to replace the lead acid batteries that currently provide backup power to cell tower sites and possibly replace ordinary lead acid batteries used in cars today.

The Nanophosphate EXT was designed to operate at extreme temperatures without requiring a heating or cooling system. The tech is expected to improve the cold-cranking capabilities of A123's lithium-ion 12V Engine Start battery. If successful, it would eliminate the primary performance advantage of lead acid in starter battery applications, A123 said.

A123 didn't provide a lot of details about the technology. Although initial tests performed at The Ohio State University's Center for Automotive Research have supported A123's high-temperature claims. The company says the batteries maintain 90 percent capacity after charging and discharging at 45 degrees Celsius (about 113 degrees Fahrenheit) for 2,000 charges -- the minimum magic number that automakers require for EVs.

CAR has started to test the cold temperature performance of the battery tech. A123 expects the tests will show the Nanophosphate EXT will deliver a 20 percent increase in power at temperatures as low as minus 30 degrees Celsius.

The Obama Administration also is counting on this new tech to pull A123 out of its tailspin.

The battery maker, founded in 2001, has received about half of a $249 million matching grant from the Department of Energy to build a factory in Livonia, Mich., as part of a broader funding effort by the administration to create manufacturing jobs and accelerate advanced battery technology in the United States. The administration is already grappling with the fallout of other loans and grants to cleantech companies that have since failed, such as solar startup Solyndra. Another failure wouldn't bode well for the administration, especially in a presidential election year.

Photo: A123 Systems

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Kirsten Korosec

Contributing Editor

Kirsten Korosec has written for Technology Review, Marketing News, The Hill, BNET and Bloomberg News. She holds a degree from Northwestern University's Medill School of Journalism. She is based in Tucson, Arizona. Follow her on Twitter. Disclosure