According to a report from Reuters, lithium ion battery maker A123 Systems is dangerously low on cash. The company filed a report just before the weekend with the U.S. Securities and Exchange Commission indicating that it "expects to have approximately four to five months of cash to support its ongoing operations."

The company says it spends between $18 million and $25 million per month in normal operational costs, and had about $68 million on hand at the end of May. In the same filing, A123 outlined plans to raise $39 million in an effort to remain afloat while it attempts to locate new business and shore up its finances. The company expects to turn a positive cash flow on a quarterly basis sometime in 2013.

A123 has major contracts with automakers such as Fisker and BMW, the former of which was involved in a massive battery recall that is said to have cost A123 nearly $67 million. The upcoming Chevy Spark EV is also slated to use batteries from A123, assuming the company is able to survive its recent monetary blows.


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    • 1 Second Ago
  • 42 Comments
      Turbo Froggy
      • 3 Years Ago
      Why won't A123 sell to the conversion community? Their prismatic 20A pouch made in the USA batteries get shipped to China where they can be bought gray market, but why? Why don't they sell these same cells in the US to people in the US? Their entire battery modules are so very cool, and converters would love to get their hands on them. I am guessing that somewhere south of $100M a year goes to China to buy LFP cells being bought by converters and hobbiests alike. That is money A123 is loosing.
        DaveMart
        • 3 Years Ago
        @Turbo Froggy
        Class action lawsuits in the US. See the article above on the Hyundai Elantra.
      mapoftazifosho
      • 3 Years Ago
      I hear Bain Capital is interested...
        Ziv
        • 3 Years Ago
        @mapoftazifosho
        Considering how much money Bain pumps into most of the businesses they invest in and how successful most of them are, that would be a great thing.
          Ziv
          • 3 Years Ago
          @Ziv
          FordFuture, even the Washington Post has had to admit that the "Romney outsourced jobs" story is a lie. You can repeat the lies of others all you want, but it doesn't make them true. Ahh... But do I detect on a retreat on one front and an attack on another. Your original post made it sound like he was a predatory investor, but your second post is whinging about robbing workers of their pensions, an issue that has never been raised in the 7 or 8 articles I have read. In short, Romney is a professional with a record of success running against an amateur with a record of failure. Obama can't run on his record so his staff is trying to "Kill Romney" as they so eloquently put it. When you are being programmed to hate someone, you might just ask "Why?" And I hope there is a group like Bain to bail A123 out if they need it. http://www.washingtonpost.com/blogs/fact-checker/post/4-pinocchios-for-obamas-newest-anti-romney-ad/2012/06/20/gJQAGux6qV_blog.html
          Ford Future
          • 3 Years Ago
          @Ziv
          Nice joke, as Bain robs worker of their pension plans, and puts the companies heavily in debt, robbing shareholders. Did you forget the -sarcasm- tag, I bet you did.
        Rick C.
        • 3 Years Ago
        @mapoftazifosho
        In his 2010 book, The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, Josh Kosman described Bain Capital as "notorious for its failure to plow profits back into its businesses," Yeah, sounds like a pleasant entity to do business with.
          EZEE
          • 3 Years Ago
          @Rick C.
          Like anything, or anyone associated with a republican, it will be the bogey man of the moment. We will hear of starving children more likely than not racism, evil evil evil. Then when they no longer serve that purpose, all will be forgiven when people start holding their hands out for cash. Case in point, haliburton has gotten no bid contracts, but since they no longer serve an evil purpose, no mention in the media. Sort of like wall street hedge fund managers. Totally evil, but then the top 10 contributions during the last election all went to Obama, every last one, no mention in the media. No longer evil hmmm? As far as private equity, yes, yes, all are evil mean spirited children rush Limbaugh yawn. Below is a list of green private equity firms that focus on environmental start ups, property, etc. I suppose you paint them evil with your open minded broad brush strokes as well: http://www.greencollareconomy.com/Green_Directory/green-private-equity/
          Ford Future
          • 3 Years Ago
          @Rick C.
          The Supreme Court has consistently robbed Shareholders of rights to control Sociopathic CEO's, shareholders are a target of this class of crook as well.
          Marco Polo
          • 3 Years Ago
          @Rick C.
          @ Ford Future Here's a tip, if you think your CEO's a sociopath, sell your shares ! (Or at least avoid invitations to go on a hunting trip with him).
      Dan Frederiksen
      • 3 Years Ago
      word on the street is that A123 has stopped production. death may already have occured
        Dan Frederiksen
        • 3 Years Ago
        @Dan Frederiksen
        people just vote me down : ) a key source of A123 cells from china is actually reporting that production has stopped and they can't get anymore. what exactly that means is unclear but given the situation my speculation is not far fetched
          EZEE
          • 3 Years Ago
          @Dan Frederiksen
          i think it's habit. Oddly, people down vote on stuff that is well written, but they do not like. Never understood that. Why down vote a rational response you may disagree with? The name calling, or something patently wrong, sure. You like light weight and aero. Cool. Maybe your cars would be too small for me, but that is your thing, so wtf? Ahhh well. It is either that or putting hands to your ears and LALALALLALALLALALAL CAN'T HEAR YOU
          porosavuporo
          • 3 Years Ago
          @Dan Frederiksen
          People are not voting him down, it's just his karma, coming from years of trolling around several corners of the internets.
      • 3 Years Ago
      That's not good, if Chevrolet makes their Spark sooner it might be quite helpful. On the other hand BEVs can also manage with energy cells (like Panasonic) rather than power cells that are usually best with hybrids. I hope A123 makes it through bad times, but it's difficult to tell one way or another.
        Spec
        • 3 Years Ago
        The Spark is not going to make a difference since it is a limited volume compliance car. :-/
          Dave
          • 3 Years Ago
          @Spec
          Thats probably true. The smart battery supplier is Hitachi - they are supplying batteries for the GM EAssist system which is being built in big numbers.
      Rick C.
      • 3 Years Ago
      Different points are being touched on over at Technologyreview.com about A123. Most the of the responses there are to the effect 'they chased subsidies, as the main focus of their business plan' and 'courted the automotive industry too much' and 'they should have supplied other industries'. For a science and tech site, the discussion is a little too business oriented for my tastes.
      Nick
      • 3 Years Ago
      That's just too bad. I hope they can get enough supply contracts soon to prevent their demise! Also, what will happen to Fisker if it no longer gets the batteries !?
        HVH20
        • 3 Years Ago
        @Nick
        They will have to spend substantial R&D capital and switch suppliers. Who knows, they might end up with more range depending on who they go with. Or they will just get their supply out of China's knock off market like everyone else does. Its easily 1/4 the price of getting it through an A123 dealer. 20Ah cells are around $17USD plus shipping/fees
      Actionable Mango
      • 3 Years Ago
      A123 batteries were revolutionary in the RC hobby. Sad to see they are in trouble.
        2 Wheeled Menace
        • 3 Years Ago
        @Actionable Mango
        They are revolutionary in ebikes and everything else too, Mango. People on my eBike forums fight over scrap cells with no legitimate history/age/source with little skepticism towards the seller at all. I've even watched people get ripped off, all while telling them it's a stupid idea and that the seller is obviously fraudulent. The demand for A123's product from hobbyists is very high, but they won't sell them. It lingers on conspiratorially nonsensical..!
          porosavuporo
          • 3 Years Ago
          @2 Wheeled Menace
          Are the DeWalt A123 powered packs still around ?
      HVH20
      • 3 Years Ago
      From what I've heard GM views battery technology as a commodity and isn't entrenched with any one chemistry, but they do have some investment in getting the spark into production and batteries can't be swapped between companies/technology as easily as people would like to think. I've had a short sale out on them since they were up at 1.50/share a few weeks ago over their hype Nano EXT magic sauce.
        Spec
        • 3 Years Ago
        @HVH20
        By what I understand, Bain buys control but then has company take out debt and pay Bain back big 'management fees'. Bain then plays their games with the company to try to increase value. If the company does better, Bain wins big. If the company does worse, then oh well, they go bankrupt but Bain sucked most (or all) of their purchase money back out in those management fees.
          EZEE
          • 3 Years Ago
          @Spec
          Here are some of their total failures where billions upon billions of people lost their jobs starving children Rush Limbaugh bogey man of the week Chimpy haliburton! AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel. Bu hey, I hear not every investment succeeded, so be sure to focus on the ones that did not. But, Corey Booker is nauseated by the attacks, and Bill Clinton said: Here's what Mr. Clinton said, vis-a-vis Mr. Romney's career at Bain: “I don’t think we ought to get in a position where we say this is bad work. This is good work." And he went on: “There’s no question that in terms of getting up and going to the office and, you know, basically performing the essential functions of the office, a man who’s been governor and had a sterling business career crosses the qualification threshold.” And we know Bill Clinton wouldn't lie, so it must be true. Duvall Patrick, and Harold Ford also come out supporting Bain. Some guy named Rattner as well.
      DaveMart
      • 3 Years Ago
      There is a giant ******* sound of battery manufacturing locating to the East, mainly China. VW reckon that they will source their batteries there, whichever chemistry they decide to loose. A123's other competition is the likes of LG, which has scooped most of the non-Nissan/Renault market, and AESC with those two companies. I am afraid I really can't see a viable business path for A123.
        DaveMart
        • 3 Years Ago
        @DaveMart
        ?The asterisks said: '*******' What the heck is the matter with that?
          Dan Frederiksen
          • 3 Years Ago
          @DaveMart
          perhaps spell it with spaces : ) just repeating it is sure to get deleted as well : )
        Spec
        • 3 Years Ago
        @DaveMart
        A123 does some manufacturing in China.
        Nick
        • 3 Years Ago
        @DaveMart
        Manufacturing in China is getting more expensive, and the logistics of getting heavy batteries shipped is pricey too. As a matter of fact, Tesla sources many of its components in the U.S. !
          Ford Future
          • 3 Years Ago
          @Nick
          No One Imports Batteries. They are all locally sourced. No one imports bricks either.
      Dave D
      • 3 Years Ago
      Sounds like time for GM or BMW to swoop in and get an ownership stake in a battery maker for the future. I hear it would be kind of cheap :-)
        Spec
        • 3 Years Ago
        @Dave D
        Or GE. Or someone. A123 has some darn good technology. They've just had some slip-ups and the industry is growing much slower than many anticipated. But A123 has good technology so they are not going to disappear off the face of the Earth. Someone will buy them but it may happen before or after bankruptcy.
          Dan Frederiksen
          • 3 Years Ago
          @Spec
          a combustion engine powers the prius o wicked one
          JakeY
          • 3 Years Ago
          @Spec
          @Marco Polo sp6870 was close, but missed the mark (probably purposefully because of the tin foil hat poke). Texaco bought the Nimh patents. Chevron bought Texaco a few months after (it still owns Texaco). The patent encumbrance does not have to do with stationary applications, but by limiting the battery size it was willing to produce/license (10ah was the effective limit, for large format they required large orders). It made EV use un-viable (specifically the RAV4 EV). This is not tin foil hat, it actually happened! http://www.cobasys.com/pdf/faq/faq.html http://en.wikipedia.org/wiki/Patent_encumbrance_of_large_automotive_NiMH_batteries#cite_note-TheCarThatCould-3 But anyways, that stuff is history now given we have lithium ion and Ovonic (which holds the patents) is now owned by BASF. Losing A123 would be bad, but not as big a deal for BEVs (where energy density is the core goal).
          Nick
          • 3 Years Ago
          @Spec
          Hopefully not Chevron..
          • 3 Years Ago
          @Spec
          Right on Nick. *adjusting tin foil hat* Chevron ruined the Nickle Metal Hydride Battery for automotive applications by embargoing the chemistry and only allowing its use in stationary power applications.
          Marco Polo
          • 3 Years Ago
          @Spec
          sp6870 , Nick, It get's tiring correcting this sort of silly conspiracy theory. Firstly, it wasn't Chevron but Texaco, and secondly, if your theory was true, what the hell did Vectrix use, and what powers the Prius ?
        Ryan
        • 3 Years Ago
        @Dave D
        I wonder what the business decision between buying A123 vs starting your own would be for GM/BMW? Would you still keep A123 around just under their name and with GM/BMW management?
          Dan Frederiksen
          • 3 Years Ago
          @Ryan
          that's a good point. A123 doesn't seem to have something impossible to duplicate. DLG in china makes a cell with similar power density to A123's 26650 cell. it might not be worth it to buy into a lot of debt and wasteful operations. although I would perhaps try to hire a few keep people. if they are still there
          brotherkenny4
          • 3 Years Ago
          @Ryan
          Old organizations are too entrenched in preconception to rally the internal capability to go in a new technological direction. In theory they don't have to be that way, they just are. Aquisition would potentially pick up the expertise they can never develop. GM though, has no interest in batteries, and maybe wisely so. Even if they were to get the technical expertise they needed, their management may not be able to handle bright people.
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