A123 Systems (AONE), SAIC Motor Expand Partnership; Looking to Build New Facility in China
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A123 Systems (Nasdaq: AONE), announced the planned expansion of its partnership with SAIC Motor Corporation Limited (SAIC Motor).
This announcement builds on the existing partnership between A123 and SAIC Motor that was established in 2009 with the formation of Advanced Traction Battery Systems (ATBS), a battery pack joint venture (JV) company. Under a new framework agreement, A123 and SAIC Motor are carrying out a feasibility study to define the business plan and required investment for a jointly developed battery manufacturing facility in China. The proposed manufacturing facility is expected to serve the local market, with an initial focus on transportation, enabling A123 to more quickly and cost-effectively meet increasing demand for advanced lithium ion battery technology.
SAIC Motor is the leader in the Chinese auto market and holds the country's top market share when considering the output of its joint ventures with General Motors and Volkswagen among others. In 2011, SAIC Motor's total vehicle production exceeded 4 million vehicles for the first time.
In support of ATBS, SAIC and A123 are evaluating the feasibility of a manufacturing JV to build a coating and cell assembly facility in China that will produce A123's 20Ah prismatic cells, which is expected to create a cost advantage for A123's technology in the Chinese market. Additionally, this is expected to substantially increase the local content of systems produced by the A123/SAIC partnership, helping to qualify the output for a variety of incentives and other financial support under China's New Energy Initiative. SAIC Motor and A123 expect that the definitive agreements setting forth the terms and conditions regarding the proposed joint manufacturing facility and its operations will be negotiated and completed by the end of September 2012.
This announcement builds on the existing partnership between A123 and SAIC Motor that was established in 2009 with the formation of Advanced Traction Battery Systems (ATBS), a battery pack joint venture (JV) company. Under a new framework agreement, A123 and SAIC Motor are carrying out a feasibility study to define the business plan and required investment for a jointly developed battery manufacturing facility in China. The proposed manufacturing facility is expected to serve the local market, with an initial focus on transportation, enabling A123 to more quickly and cost-effectively meet increasing demand for advanced lithium ion battery technology.
SAIC Motor is the leader in the Chinese auto market and holds the country's top market share when considering the output of its joint ventures with General Motors and Volkswagen among others. In 2011, SAIC Motor's total vehicle production exceeded 4 million vehicles for the first time.
In support of ATBS, SAIC and A123 are evaluating the feasibility of a manufacturing JV to build a coating and cell assembly facility in China that will produce A123's 20Ah prismatic cells, which is expected to create a cost advantage for A123's technology in the Chinese market. Additionally, this is expected to substantially increase the local content of systems produced by the A123/SAIC partnership, helping to qualify the output for a variety of incentives and other financial support under China's New Energy Initiative. SAIC Motor and A123 expect that the definitive agreements setting forth the terms and conditions regarding the proposed joint manufacturing facility and its operations will be negotiated and completed by the end of September 2012.
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