Chrysler Selects A123Systems as Battery Supplier
By Michelle Krebs April 7, 2009By Bill Visnic
With barely three weeks to concoct a workable alliance with Fiat S.p.A lest the Feds roll out the bankruptcy carpet, Chrysler LLC had enough extra time on its hands this week to announce its latest team-up: a strategic alliance with Massachusetts-based battery developer A123Systems.
Chrysler said in a press release that the deal "reinforces both companies'" commitment to expand battery manufacturing technology in the United States, reducing dependency on foreign sources of energy and greenhouse gas emissions."
Chrysler further said A123Systems would be the supplier of production batteries for its first production electric vehicles, unveiled and demonstrated last September and displayed several times since. Still, the skeptical consider the proposed family of fully electric and range-extended electric vehicles little more than vaporware from a company that's got its hands full paying the electric bill, much less leading development of electric vehicles.
Batterymaker A123Systems, meanwhile, also could be struggling for credibility after being shouldered aside by rival Compact Power Inc. for the contract to supply General Motors Corp. with batteries for the ultra-high-profile Chevrolet Volt extended-range electric vehicle. The Massachusetts company, which has grown rapidly in recent years and already has facilities in Michigan, also has "plans for a Michigan-based production facility," according to Chrysler's release.
In addition to forming plans for U.S. production of its batteries -- as opposed to GM's Compact Power-supplied batteries, which will be produced by Korea's LG Chem -- A123Systems also is seeking $1.8 billion from the enormous $25-billion Advanced Technology Vehicles Manufacturing Program fund established by the U.S. Department of Energy.
The company said the funds would help it to build battery production plants in Michigan; the state also is offering millions in tax incentives for companies siting battery production within its borders.
In September, Chrysler's ENVI advanced-technology group first showed prototype versions of its Jeep Wrangler and Chrysler Town & Country minivan, as well as the Dodge Circuit EV; at January's Detroit auto show, it added the Chrysler 200C concept car and an electrified Jeep Patriot. The two Jeeps and the Caravan are range-extending electric vehicles, while the Dodge Circuit and the 200C are fully electric models said to have a driving range of 150 to 200 miles.
Chrysler promised to have 100 of the battery-powered vehicles in demonstration fleets this year and bring one of the vehicles to production by 2010.
Michigan Governor Jennifer Granholm seemed convinced, saying, "Chrysler's partnership with A123Systems marks a significant milestone at a critical time in the automotive industry and in the state of Michigan.
"This strategic alliance that will result in two companies joining forces to develop and produce advanced technology in Michigan will create new jobs in the state, deliver benefits to consumers and contribute significantly to bringing more environmentally friendly vehicles to market," Granholm added.
Photos by Chrysler
1 - Chrysler 200C EV concept
2 - Chrysler Town & Country EV concept
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