Another cleantech fail: A123 Systems bankruptcy
Atul Kapadia, CEO of battery components company Envia Systems, said A123 Systems bet on the wrong battery technology.
Battery maker A123 Systems filed for Chapter 11 bankruptcy Monday night and will sell its automotive battery business to Johnson Controls for $125 million. The deal includes factories in Michigan and China and its stake in joint venture Shanghai Advanced Traction Battery Systems Co.
The bankruptcy wasn't news to the industry, which has been watching the company's demise for some time, said Atul Kapadia, CEO of battery components maker Envia Systems, based in Hayward.
"We never competed against A123. And the main reason is, the technology choice made by A123 ten years ago — lithium-ion phosphate — simply doesn't have the energy capacity to store the energy needed to make cars affordable."
Based in Waltham, Mass., A123 was a much-hyped cleantech company. It raised more than $200 million from venture capitalists including North Bridge Venture Partners, Sequoia Capital, CMEA Ventures, FA Technology Ventures and others before its public offering in 2009.
It also received a $249 million federal grant to build its lithium-ion battery factory in Livonia, Mich.
In August, the company announced a deal to sell 80 percent of its business, including the automotive business, to Chinese company Wanxiang for $450 million.
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