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Print Edition StoriesWednesday, August 11, 2010
A123's net loss widens with launch of new storage tech firm
By Kyle Alspach
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A123 Systems Inc. disclosed that it has helped to launch a new company, 24M Technologies Inc., which is working on new storage technology primarily to serve the electric grid.
The startup’s technology is spun out of A123 and includes elements of both lithium ion and flow batteries, A123 CEO David Vieau said in an earnings call Tuesday. The technology is “a significant change or departure from traditional lithium ion,” he said.
A123, a Waltham-based lithium ion battery maker, will be a stockholder and have a board member in the company, Vieau said. The company is receiving venture capital, he said, though he didn’t provide specifics.
A state filing shows that 24M Technologies is based in Wellesley and incorporated in March. Yet-Ming Chiang, a co-founder of A123, is a director and the treasurer of the company, according to the filing.
The president of 24M is listed as Throop Wilder, a former executive of Boxborough-based Crossbeam Systems Inc.
The storage technology produced by 24M could be used for other applications in addition to the grid and likely will be commercialized in the latter part of this decade, Vieau said.
Meanwhile, A123 announced that it has withdrawn from a program to supply batteries for Chrysler electric vehicles.
A123 pulled out after Chrysler introduced a competing vendor, which A123 believed would be willing to supply batteries at below the current market price, Vieau said.
The project, originally announced in April 2009, had also “significantly diminished in scale from our earlier expectation,” he said.
However, A123 was recently selected by a “major auto manufacturer” as the sole development partner for a new electric vehicle that has not been publicly announced, Vieau said.
For the second quarter, A123 said its net loss widened as the company continued to invest ahead of major projects in the automotive and electric grid sectors. They include 44 megawatts worth of grid-stabilizing battery systems for AES Energy Storage, a project announced by A123 on Tuesday.
A123 (Nasdaq: AONE) reported a net loss of $34.2 million in the quarter, up 18 percent from the first quarter.
Operating expenses grew 10 percent to $29.6 million in the second quarter, including increased spending on production startup. The company expects its new manufacturing facility in Livonia, Mich., to go online this fall.
A123 is seeing strong growth in new customers and orders and is on track with its capacity expansion plans, the company said.
A123 saw second-quarter revenue of $22.6 million, down from $24.4 million in the first quarter but up from the second quarter of 2009, when revenue was $19.7 million.
The company saw $10.5 million in transportation revenue and $5.1 million in commercial revenue during the second quarter, along with services revenue of $7.1 million. The company had no revenue for its electric grid business in the second quarter, after earning $5.2 million in grid revenue during the first quarter.
In July, A123 signed a lease to open a research and development facility for its grid battery business in Westborough, the company’s third location in Massachusetts. The company already manufactures the trailer-size battery systems in Hopkinton.
The company also plans to move its headquarters and R&D hub in Watertown to a larger facility in Waltham. A123 expects to move to the nearly 100,000-square-foot facility next March, a company official said previously.
The company’s expansion in Massachusetts is the result of a $5 million forgivable loan awarded by the Massachusetts Clean Energy Center in April. The company has pledged to add more than 250 jobs in Massachusetts as part of the four-year, $80 million expansion. The expansion would roughly double the company’s current employment in the state.
Meanwhile, the Livonia facility, funded in large part through a $249 million federal stimulus grant, will handle production of the company’s batteries for electric vehicles. A123 has deals to produce batteries for customers including Navistar, BMW and Eaton Corp.
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