The Fisker Karma was recalled late last year because of improper alignment of the batteries' hose clamps, but that was quickly resolved. Today, A123 Systems – the company that makes the Karma pack – announced a replacement program for "battery modules and packs that may contain defective prismatic cells produced at A123's Livonia, Mich. manufacturing facility." The $55 million program will kick off with shipments this week and does not affect any cells, prismatic or cylindrical, made at A123 facilities outside of Livonia.

A123's CEO, David Vieau, said in a statement that, "We have isolated the root cause of the defective cells and we are confident that we have pinpointed the source of the defect and corrected it. As a result of engineering analysis and testing, we believe this is not a safety issue, and we have determined the root cause and have taken corrective actions."

A123 has over 20 deals to supply lithium-ion batteries in vehicles as different as BMW hybrids and Via Trucks, the Chevy Spark EV and Tata's hybrid buses. Today's announcement did not mention any specific vehicle by name, but Green Car Reports reports that the Karma that recently died while it was being tested by Consumer Reports was indeed affected by bad cells from Livonia. A123 says that the defective cells do not pose a safety risk and that the cost of the replacement program will be spread out over the next several quarters.

*UPDATE: Fisker has issued a statement on the matter, adding that "A123 is replacing all impacted battery modules and packs for the Fisker Karma." Fisker is also extending the warranty period from 50 months/50,000 miles to 60 months/60,000 miles in the U.S. and from 48 months/100,000 km to 60 months/100,000 km in Europe. Fisker calls this a "significant upgrade to the VIP Customer Care Coverage" that all 2012 Karma buyers get. Read the statement after the jump.
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A123 Systems Launches Replacement Program for Potentially Defective Battery Packs and Modules

WALTHAM, Mass., March 26, 2012 (GLOBE NEWSWIRE) -- A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today announced that the company has launched a field campaign to replace battery modules and packs that may contain defective prismatic cells produced at A123's Livonia, Mich. manufacturing facility. A123 has begun building replacement modules and packs and expects to begin shipping them to impacted customers this week. The company anticipates that the cost of replacing the affected customer modules and packs will be approximately $55 million and expects it will be funded over the next several quarters. A123 will host a conference call at 10:30 a.m. EDT.

"Recently, A123 has discovered that some prismatic cells made in our Livonia facility may contain a defect which can result in premature failure of a battery pack or module that includes a defective cell. We have isolated the root cause of the defective cells and we are confident that we have pinpointed the source of the defect and corrected it. As a result of engineering analysis and testing, we believe this is not a safety issue, and we have determined the root cause and have taken corrective actions," said David Vieau, CEO of A123 Systems. "We are working to get replacement packs and modules to impacted customers as quickly as possible. It is important to note that this defect has been discovered only in some prismatic cells manufactured at our Livonia facility. Prismatic cells produced at another A123 facility are not impacted. Further, the cylindrical cells we make at our facilities in China for a number of other transportation programs, as well as the majority of our grid energy storage systems and commercial applications, are also not affected by this defect."

Vieau continued, "In parallel with this field campaign, as we have discussed previously, we continue to implement actions that we believe will improve operations and minimize the possibility of quality issues going forward. This includes hiring a Chief Operating Officer, Ed Kopkowski, who has more than 25 years of global management and operational leadership in improving quality and reducing costs. A123 has produced hundreds of thousands of high-quality prismatic cells at another facility, so while the initial rapid ramp up of our Michigan operations to satisfy customer demand has resulted in near-term operational challenges, we are confident in our ability to overcome these issues. We are devoting our full resources to fixing this situation and moving forward to continue delivering high-quality products to our customers."

Additional information and ongoing updates about A123's Livonia prismatic cell field campaign can be found online at http://www.a123systems.com/media-room-service-campaign.htm.

About A123 Systems

A123 Systems, Inc. (Nasdaq:AONE) is a leading developer and manufacturer of advanced lithium ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company's proprietary Nanophosphate® lithium iron phosphate technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information please visit www.a123systems.com.

Safe Harbor Disclosure

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the availability of replacement modules and packs, the timing of the commencement of shipping of replacement packs and modules, the anticipated cost of the field campaign and the number of affected battery packs. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in A123's ability to produce replacement modules and battery packs and other risks detailed in A123 Systems' 10-K for the year ended December 31, 2011 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123's expectations only as of the date of this release and should not be relied upon as reflecting A123's views, expectations or beliefs at any date subsequent to the date of this release.


Fisker Automotive Reinforces Commitment to Quality with Enhanced Customer Care

Anaheim, California USA – March 26, 2012: Fisker Automotive has announced a significant upgrade to the VIP Customer Care Coverage included with the purchase of all 2012 Model Year Karma vehicles. This new initiative will apply both to existing and future 2012 Model Year Karma customers.

Fisker decided to make this enhancement in response to the fact that its high-voltage battery supplier, A123 Systems, discovered a latent manufacturing defect in some prismatic cells made in its Livonia, Michigan facility that could result in battery underperformance and decreased durability. As a result, A123 is replacing all impacted battery modules and packs for the Fisker Karma.

The enhanced customer care package includes:

A complete battery replacement at no cost for all affected 2012 MY Fisker Karma owners
All North American customers will receive a full vehicle warranty extension from 50 months/50,000 miles to 60 months/60,000 miles.
In Europe, coverage also will be extended from 48 months/100,000 km to 60 months/100,000 km.

Fisker CEO Tom LaSorda said, "The entire Fisker Team is committed to the complete satisfaction of our customers and their experience with our vehicles. As a new technology start-up Company, we have stepped up to many challenges in our short history as we have launched one of the most advanced electric vehicles with extended range in the world."

Fisker has been working closely with A123 Systems regarding a high-voltage battery power loss experienced in one of our customer's vehicles, belonging to Consumer Reports.

The problem was traced to the A123 battery pack by Fisker's Quality SWAT Team. The top management from both companies immediately established teams to work together to find the actual root cause. Fisker Automotive's CEO, Tom La Sorda visited the A123 facility to support this initiative.

"We especially want to thank our valued customers for their ongoing support and continued confidence in us," said LaSorda. These "early adopters" have the vision to embrace this new technology and become brand advocates as we launch the Fisker Karma in the many markets around the world. To them, we say a special "Thank You" and know they will appreciate these added customer care benefits," he added

Fisker will work with our distributors, retailers and customers to communicate the details and status of this voluntary battery exchange program.

In addition, Fisker's Quality SWAT Team also has been working aggressively on the next generation vehicle software upgrade to improve the vehicle experience to customers, with a release planned in the next few days.

"We have delivered over 630 vehicles to customers in North America and Europe since sales began at the end of last year. Our customers continue to report the excitement they feel when they drive their Karma. The design is so unique that the car draws attention like no other; the electric powertrain is so quiet and the handling is exhilarating. We look forward to satisfying many more customers in the months and years ahead," adds LaSorda.

ABOUT FISKER AUTOMOTIVE, INC.
Fisker Automotive is an American car company, founded in 2007, committed to producing electric vehicles with extended range (EVer) that deliver uncompromised responsible luxury. The company is designing and developing the world's first line of premium electric plug-in hybrids representing the company's firm belief that environmentally conscious cars need not sacrifice passion, style, or performance. Fisker Automotive is a global company that is redefining luxury for the modern sports car buyer. For more information on the brand and the Fisker Karma Sedan, please go to http://fiskerautomotive.com.


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    • 1 Second Ago
  • 33 Comments
      Dan Frederiksen
      • 3 Years Ago
      I hope the A123 cells survive the bankruptcy, hopefully with less stupid marketing. the loss of fisker is not important as they weren't able to make relevant cars anyway.
      Letstakeawalk
      • 3 Years Ago
      So CR's Karma problem was indeed due to a faulty battery from the supplier. I am sure that they will mention that detail when they write their final review, and make sure to inform the public that the battery issue is being resolved.
      marcopolo
      • 3 Years Ago
      Only three article ago, Fisker was reported as needing $100 to fix it's problems with the Karma. Exactly as I predicted at least this problem, so breathlessly reported as Fiskers doom, is being rectified at the component makers expense. What a disappointment for all those Fisker haters!
        Dan Frederiksen
        • 3 Years Ago
        @marcopolo
        saying that fisker auto will die doesn't require hate. that's just a fact. and you are probably the most hate filled here. darkness owns you.
          marcopolo
          • 3 Years Ago
          @Dan Frederiksen
          @DF, Matthew 7: “Judge not, that you be not judged. For with the judgment you pronounce you will be judged, and with the measure you use it against others, so shall it be measured to you.!
      mary2al
      • 3 Years Ago
      I have been buying and driving vehicles running on Lithium batteries for five years. These batteries were all made in China and thousands of dollars of them died within a year. This is the same scenario EXCEPT if A123 identified the problem and corrected it that would be different than what's been happening in China as cells come form many sources though they look the same and there was no recourse after failure. It seems that in China if you can produce something that looks sellable that's all that's required--no warranties. So I think we are moving forward and this is part of the last stages of R & D.
      goodoldgorr
      • 3 Years Ago
      The entire battery of the car is composed of many many individual cells and if only one cell or more is defective then all the battery become defective because of innequality in the repartition of the electrical current. One defective cell impart the whole system and we witness a rapid degradation of range, power, self depletion, total capacity, etc. It's just a matter of time that the whole battery get brick and become costly trash headed for costly polluting recycling.
      Nick From Montreal
      • 3 Years Ago
      Tesla & AC Propulsion idea of focusing on the management & self-diagnostic of thousands of cells doesn't look so bad after all. These additional layers of protection and constant monitoring makes the pack more dependable. From Tesla's 2006 "The Tesla Roadster Battery System" white paper: "The high level of redundancy and multiple layers of protection in the Tesla Roadster battery pack have culminated in the safest large Li-ion battery that we or many of the experts in the field, with whom we’ve consulted, have seen." Kind of crazy that a company concentrating on one aspect (A123's battery pack) cannot do as good of a job than one making complete cars (Tesla). Even if A123 ships more different form factors than Tesla, they should have better self-testing technology.
        Anne
        • 3 Years Ago
        @Nick From Montreal
        Nick, you are quoting Tesla PR. That doesn't say a lot about the quality of A123 batteries. Even the best may stumble: http://wheels.blogs.nytimes.com/2011/11/04/rolls-royce-recalls-nearly-600-ghost-models-for-fire-hazard/
      EVnerdGene
      • 3 Years Ago
      $55M ($55,000,000) to replace batteries in 250 delivered cars ? youch! spensive batts errrr, besides the batteries, aren't there problems with Chinese motors or splines on the Chinese motors that was all the Chineser's fault and software that was all Visteon's fault
        PR
        • 3 Years Ago
        @EVnerdGene
        The recall isn't limited to just Fisker cars. It applies to all cells built by this machine. There are no numbers available for how much the recalls just for the Fisker are. Your assumptions on cost are false, and not based in fact.
      DaveMart
      • 3 Years Ago
      'Cause. According to the company, one of four automated tab welding machines in the prismatic cell manufacturing process at the Livonia, Michigan facility was incorrectly calibrated, causing a misalignment of a certain component in some prismatic cells. This defect was undetected by standard visual and electrical inspection. When the defective prismatic cells were subsequently compressed as part of the module assembly process, a mechanical interference was created between the misplaced component and the foil pouch which contains the cell. In certain cases, this interference breaches the foil pouch electrical insulation causing an electrical short which can cause premature failure of the battery module or pack, leading to decrease in performance and reduced battery life. A123 says it has isolated the root cause of the defective cells to this single automated welding machine, and has recalibrated it to conform with the other three automated welding machines at the Livonia facility. ' http://www.greencarcongress.com/2012/03/a123-20120326.html
        Spec
        • 3 Years Ago
        @DaveMart
        Well . . . I hope that really was the problem and that it is fully solved. A123 needs to crank out these batteries and get them out there. I wish GM could move their A123-based Spark EV project forward . . . that might be a nice little commuter EV. It is a bit worrying that they are not able to handle the failure of a cell or two. I'd hope they could detect that and work around it. But perhaps several cells failed.
      Spec
      • 3 Years Ago
      LTAW, I hadn't read that article yet. Ah thanks. Well, that is a tricky error . . . the cells pass all tests since they work individually but when built into a pack, they short each other out. Seems like the pack builder should have spotted that though. Perhaps it only happened after a lot of vibration & moving around. Well, here is a bit of good news . . . this is a great demonstration of the safety of A123 cells. Despite getting shorted out, there was no fire.
      Jeff
      • 3 Years Ago
      I'm sure CR will mention that the dead Karma was attributed to a faulty battery pack manufactured by A123 since they are relatively unbiased, but the rest of the media and society (in large part) only cares that it was a Fisker that broke down. It's very sad that hybrid and alternative fuel vehicles are so scrutinized by media/society, when it is this pioneering enterprise that is so beneficial to the planet and our health. Most everyone sees the merit in hybrid technology, yet they take every opportunity to trump up the hiccups and growing pains along the way. It's a new technology that is developing at a rapid clip and there will be challenges, but the constant scrutiny doesn't help the cause. We should all be rooting for Fisker, Tesla, Coda, et all to succeed, rather than lambasting them for ever manufacturing flaw along the way. It's so refreshing having some options in design and powertrain configuration - gives us comsumers more power and will bring the cost of this developing technology down to a point of mass adoption.
      PR
      • 3 Years Ago
      Sh!t happens for everyone: Even BMW has battery problems of their own: FRANKFURT, March 26 (Reuters) - BMW AG, the world's largest premium carmaker, is recalling about 1.3 million cars for repair worldwide due to a possible problem with a battery cable cover in the trunk, the carmaker said on Monday. The recall affects 5- and 6-Series BMWs built between 2003 and 2010, BMW said in a statement. "In some remote cases, the battery cable cover inside the boot of these vehicles may be incorrectly mounted," it said. "This can result in the electrical system malfunctioning, the vehicle failing to start and, in some cases, to charring or fire," the company said, adding it was not aware of any accidents or injuries to people due to the problem. http://www.chicagotribune.com/sns-rt-bmwrecall--update-3l6e8eq6wa-20120326,0,43591.story There aren't mindless zombie hoards saying BMW is a failure because of these 1.3 Million BMW's being recalled. There is absolutely no more justification for implying A123 or Fisker are failures for a much, much smaller recall.
        DaveMart
        • 3 Years Ago
        @PR
        I'd go along with your basic point, but there is no comparison in the relative size of the problem, as BMW unlike A123 or Fisker has massive resources and a far broader portfolio of cars unaffected by the recall. So those who feel that there are substantial problems for the latter two are not proven wrong by this, nor is there any remote possibility that the problem will prove fatal for BMW. A 123 in contrast was making large losses, not uncommon at that stage in company development but substantial in relation to the size of the company even before it had this problem.
        EZEE
        • 3 Years Ago
        @PR
        Dan disagrees. Take that as you will....
      2 Wheeled Menace
      • 3 Years Ago
      <--- getting some serious lulz out of this. And WTF is A123 doing? so frustrating to watch the ONLY potentially viable battery maker in the US drop the ball again, and again, and again.. meanwhile, hobbyists scramble desperately to get used/defective 20AH pouch cells out the back door... what the hell is going on with this company?
        Spiffster
        • 3 Years Ago
        @2 Wheeled Menace
        Yeah, that back door / china made / "Made in USA" stamped business sounds fishy as hell...
        EVSUPERHERO
        • 3 Years Ago
        @2 Wheeled Menace
        So they really do produce a 20ah cell that really is 19 ah when tested in Livonia Michigan? I would like to know the quantity of production from this plant? Korea is where the good ones come from. Now I have to worry about getting these rejects instead of the good ones. No kidding, they will probably sell the rejects to Chinese brokers, ship them there, when they receive my money, ship them back. Much bunker fuel will be consumed. Jack Rickard said A123 was looking at places in China to produce their battery, WTH!?
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