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Electric Car Battery Maker A123 Systems Files Bankruptcy

A123 Systems Inc. (AONE), a maker of rechargeable lithium-ion batteries for electric cars, filed for bankruptcy after failing to make a debt payment that was due yesterday.

The company listed assets of $459.8 million and debt of $376 million as of Aug. 31 in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Chapter 11 is the section of the Bankruptcy Code used by companies to reorganize.

A123 didn’t expect to be on time with an interest payment due yesterday on $143.8 million of notes expiring in 2016, or to make a payment due yesterday on $2.76 million in outstanding 6 percent notes, the Waltham, Massachusetts-based company said yesterday in a regulatory filing.

Read more: http://www.bloomberg.com/news/2012-10-16/electric-car-batter...

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What a shame

Another promising company falls at the hand of the bankers.

This is not about Obama who was president over the Dept of Energy that only guaranteed a loan for $229M (peanuts) or Bush, under whom they gave an actual loan of $6M. It's about the system we have for government assistance.

Once again, it's the bankers who set the system up to fail. Basically, if the bankers want a company to win, they do. If not, they fail. Period. These little companies get 'just enough' to barely get into business and get all kinds of strings placed on them, regulation-wise, that they are strapped with thousands of employees (non-producing overhead like layers of management, legal, board of directors, quality, safety, and on and on) that one little setback which is inevitable in a startup, will force them to miss a payment. Then the banks (who actually loaned the fiat paper) get to call the loan. Remember, a government guarantee only backs 95% of the loan. Then banks still control 5% so they can call that part.

This way those banks aren't on the hook for the vast majority of payout should a failure suddenly occur. It's another case of privatize the profits with public risk.

Now, we have another corporate monopolistic company (Johnson) buying up the pieces at pennies on the dollar. Go figure. What will they do with it? Whatever the banks want, again.

This is why we have to stop the government from helping out or subsidizing any industry. It's the gun by which the banks force industry to go their way. If the rules were fair, small investors could gather en masse to help companies like this and decide if one missed payment should kill the whole project.

End government subsidies and then end the stock market. They're nothing but a scam on the people, not unlike the Federal Reserve.

I don't think this involves tesla

I think tesla has their own technology.

But my question is what do we do with the batteries when they are exhausted?

Not really

Battery technology has been advancing at a decent rate over the past decade. We are far beyond the lead acid batteries that could take a car 20-30 miles on a full charge. That distance has doubled and doubled several times. With cars that can go over 300 miles on a charge they are close to being very competitive. And with battery discoveries in the lab boasting a 10x capacity, it is very likely that we could see an electric car that can travel across the country on one charge.

I do agree that inductive charging from the road (which is today possible) would be great, but until roads are privatized, roads will not be upgraded any time soon.

And part of A123's problems was that they promised some big advances and likely could not deliver.

I agree with your 1st and 3rd paragraphs

and would even extend them somewhat.

However, I disagree one inductive charging. It's not, nor ever, going to be and efficient way of filling up. With the quantity of energy being discussed, we can't afford a loss of a few percent, let alone 50%. On top of that, the resources required to build chargers into all the roads is a non-starter.

Besides, that is only so we don't have to stop and fill up. Do we really need to be able to drive every car thousands of miles without stopping for a short period? I say no. At worst, a battery swap could be done in a minute or two.

ok, but I disagree with your stance

I believe it is the role of government to invest in roads and infrastructure. This is pretty much the only area of government spending which DOES help the economy, and is constitutionally authorized

Now promoting the electric car is fine and dandy, but what most people don't realize is the $40,000 electric car on the lot really "costs" around $70,000 to manufacture. Where does the extra $30,000 come from?

Just something I figured I point out.

Peace.

a nod's as good as a wink to a blind bat

Batteries impractical.

Electric cars that use batteries are not practical. Instead private industry needs to build an electric delivery system built right into the road.
grant

Like this?

http://www.skytran.us/ is a fast, cheap, silent and super-efficient people mover. It can move the equivalent of a current 3 lane highway and be placed on slightly beefed up telephone poles. It can even be modified for hauling a single pallet (most goods get hauled this way at one stage of their travels) from dock to dock. It would eliminate 90% of the consumer costs (insurance, two way trips like pizzas or school kids, accidents, garages, police) involved in most of our vehicle miles.

With that breaking into a given neighborhood, it's much more viable to see electric cars and small trucks fill in the gaps for things like the occasional refrigerator delivery.

railroads?

are you talking about railroads?

reedr3v's picture

Another of Obama's subsidized Green Bubbles

goes bust.

Too bad

That is too bad, they were on the leading edge of getting some decent car batteries that would have the potential of some very long distance electric cars. I have seen several innovation releases from them since the late 90s.

Likely their shoes will be filled by a foreign company.

They're still making them here in Japan

Near where I live - Panasonic is producing them for
Toyota.

One limitation on lithium ion - as I understand it -
is that the supplies of lithium are rather limited:

http://ergobalance.blogspot.jp/2008/05/world-lithium-supplie...

I don't understand capacitors all that well, but have seen
some discussion/speculation about super capacitor technology
replacing battery tech for EV - anyone know about this?

One US EV company that seems to be getting something right
both with their products and business model:

http://www.brammo.com/empulse/

Apparently investors were unconvinced.

I wonder how much of the claimed assets were real and how much was 'good will' or inflated values of patents based on future profits.

Free includes debt-free!