A123 Systems

Corporate brand

A U.S.-founded developer and manufacturer of lithium iron phosphate batteries and energy-storage systems, now operating as a subsidiary of China's Wanxiang Group.

Last updated October 14, 2026

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Overview

A123 Systems is a battery technology and energy-storage company founded in the United States in 2001 by Yet-Ming Chiang, Bart Riley, and Ric Fulop. Its early technology was connected to materials research developed at the Massachusetts Institute of Technology and was commercialized around lithium-ion cells using doped nanophosphate and lithium iron phosphate chemistry. The company positioned this technology around high power output, rapid charging, durability, thermal stability, and abuse tolerance—attributes relevant to hybrid vehicles, electric vehicles, commercial transportation, power tools, and stationary energy storage. During the second half of the 2000s, A123 became one of the most visible U.S. advanced-battery companies. It entered development programs supported by the United States Advanced Battery Consortium and the U.S. Department of Energy, including projects aimed at hybrid and plug-in-hybrid vehicle applications. It also attracted strategic and financial partners. General Electric invested in the company in connection with a proposed battery-supply relationship with Think Global, while A123 formed a joint venture with Shanghai Automotive Industry Corporation, or SAIC, to manufacture and commercialize batteries in China. By 2009, the company had approximately 2,500 employees globally and had become a publicly traded company on NASDAQ. A123 pursued a broad customer and application portfolio. Its batteries were supplied or developed for passenger vehicles such as the Fisker Karma and Chevrolet Spark EV, hybrid buses operated with BAE Systems' HybriDrive propulsion system, commercial trucks and delivery vehicles, electric motorcycles, racing vehicles, and industrial power tools. The company also developed a significant grid-storage business. Its systems were used or demonstrated for frequency regulation, operating reserves, renewable-energy integration, and other grid-support functions, including projects with AES in the United States and Chile and a demonstration with Dongfang Electric in China. The company expanded manufacturing capacity in Michigan with substantial public support. A large facility in Livonia and related operations in Romulus were intended to support automotive-scale production. However, projected electric-vehicle demand did not develop as quickly as anticipated. Customer orders from several automotive partners were below forecasts, some prospective customers encountered financial or financing difficulties, and A123 faced the high costs of scaling factories and supporting automotive programs. In late 2011, it reduced its workforce as demand expectations weakened. A product defect affecting battery packs and modules supplied to several customers, including Fisker Automotive, resulted in a replacement campaign announced in early 2012. The issue received additional attention after a Fisker Karma shut down during a Consumer Reports test. The estimated cost of the replacement program placed further pressure on A123's finances. A123 filed for protection under Chapter 11 of the U.S. Bankruptcy Code on October 16, 2012. Its restructuring process included competing bids for the company's assets. Johnson Controls initially entered an asset-purchase agreement but withdrew after losing the bankruptcy auction. In January 2013, Wanxiang America acquired most of A123's assets for approximately $256.6 million, while the company's government-related business was sold separately to Navitas Systems. A123's post-bankruptcy operations continued under Wanxiang ownership. The company later reorganized parts of its portfolio. In 2014, NEC acquired A123's grid-energy-storage business. In 2018, Lithium Werks announced the acquisition of A123's Changzhou factory and associated China, Europe, and U.S. customer and workforce operations; Lithium Werks subsequently continued production of the nanophosphate product range under its own branding. A123 stated after that transaction that it intended to concentrate more heavil…

History

A123 Systems was established in the United States in 2001 by Yet-Ming Chiang, Bart Riley, and Ric Fulop. Its technology originated in part from materials research associated with the Massachusetts Institute of Technology. The company developed lithium-ion batteries using doped nanophosphate and lithium iron phosphate chemistry, emphasizing high power, rapid charging, durability, and thermal stability. In November 2005, A123 announced a faster-recharging battery system based on licensed nanophosphate materials. Government-backed development followed. In 2006, the United States Advanced Battery Consortium, working with the Department of Energy, awarded A123 a $15 million contract for hybrid-electric-vehicle battery development. A further $12.5 million grant was announced in 2008 for plug-in-hybrid applications. These programs helped establish A123 as a prominent participant in the U.S. advanced-battery sector. The company pursued commercial relationships across transportation. BAE Systems incorporated A123 technology into the HybriDrive propulsion system used in Orion VII hybrid buses. A123 also worked with Think Global, Chrysler's ENVI program, Fisker Automotive, General Motors, SAIC, BMW, Navistar, Smith Electric Vehicles, and other vehicle or powertrain companies. Its batteries were used or proposed for passenger cars, hybrid buses, delivery vehicles, racing applications, and electric motorcycles. In 2009, A123 raised approximately $380 million in a NASDAQ offering and reported a global workforce of roughly 2,500 employees. A123 expanded into stationary storage in 2008 by delivering a system to AES in Southern California. It later supplied or supported projects involving operating reserves, frequency regulation, and renewable-energy integration. Projects included AES installations in Chile, a 20-megawatt system associated with AES in New York, a large storage installation at the Laurel Mountain Wind Farm in West Virginia, and a 500-kilowatt demonstration with Dongfang Electric in China. To support automotive-scale production, A123 invested heavily in Michigan manufacturing. In 2009, the company received a $249 million Department of Energy grant and state incentives for facilities in Romulus and Livonia. The Livonia factory opened in 2010 and was described as the largest lithium-ion battery manufacturing facility in North America at the time. The company also applied for substantial federal loans, although not all requested or awarded support was ultimately used. The anticipated market for electric and plug-in-hybrid vehicles developed more slowly than A123 and its customers had projected. Orders from Fisker, General Motors, SAIC, BMW, and other customers fell below expectations, while the company continued to bear the costs of factory expansion and automotive qualification. A123 laid off 125 workers in December 2011. In early 2012, it announced a replacement campaign for defective battery packs and modules supplied to several customers, including Fisker. The issue became widely visible after a Fisker Karma shut down during a Consumer Reports test, and A123 estimated the campaign would cost about $55 million. Wanxiang Group agreed in August 2012 to invest up to $465 million for a possible majority stake, but the transaction was not completed before A123 entered bankruptcy. On October 16, 2012, A123 filed for Chapter 11 protection. Johnson Controls initially agreed to purchase assets for $125 million, subject to bankruptcy-court approval and competing bids, but withdrew after losing the auction. In January 2013, Wanxiang America purchased most of A123's assets for approximately $256.6 million and established A123Systems, LLC. Navitas Systems separately acquired the government business. After the bankruptcy, A123 continued under Wanxiang ownership. NEC acquired the grid-storage business in 2014. In 2018, Lithium Werks acquired the Changzhou factory and associated customer and workforce operations in China, Europe, and the United States. Lithium Werks continued the nanophosphate product family under its own name. A123 subsequently described its strategic focus as more concentrated on automotive applications. The company's current public disclosures are limited, and detailed information about present leadership, ownership structure below Wanxiang, and operating markets is not consistently available.

2018
Lithium Werks acquires Changzhou operations
[1]A123 Systemsen.wikipedia.org
Lithium Werks takes over A123's Chinese factory and related customer and workforce operations.
2014
Grid-storage business sold to NEC
[1]A123 Systemsen.wikipedia.org
NEC acquires A123's grid energy-storage operations.
2013
Wanxiang acquires principal assets
[1]A123 Systemsen.wikipedia.org
Wanxiang America purchases most A123 assets out of bankruptcy and establishes A123Systems, LLC.
2012
Battery replacement campaign and bankruptcy filing
[1]A123 Systemsen.wikipedia.org
A123 announces replacement of defective packs and modules and later files for Chapter 11 bankruptcy protection.
2011
Nanophosphate engine-start battery introduced
[1]A123 Systemsen.wikipedia.org
A123 introduces a lightweight 12-volt engine-start battery as a drop-in alternative to conventional lead-acid batteries.
2010
Livonia manufacturing facility opens
[1]A123 Systemsen.wikipedia.org
The company opens a large lithium-ion battery plant in Livonia, Michigan, designed for automotive-scale production.
2009
NASDAQ listing and Michigan manufacturing investment
[1]A123 Systemsen.wikipedia.org
A123 raises approximately $380 million through a public offering and receives major support for Michigan battery-production facilities.
2008
Expansion into grid energy storage
[1]A123 Systemsen.wikipedia.org
A123 delivers its first battery energy-storage system to AES for substation applications in Southern California.
2006
First major USABC hybrid-vehicle development contract
[1]A123 Systemsen.wikipedia.org
A123 receives a $15 million contract to optimize its battery technology for hybrid-electric vehicles.
2005
Nanophosphate battery system announced
[1]A123 Systemsen.wikipedia.org
A123 introduces a faster-recharging lithium-ion system based on doped nanophosphate materials licensed from MIT.
2001
A123 Systems is founded
[1]A123 Systemsen.wikipedia.org
Yet-Ming Chiang, Bart Riley, and Ric Fulop establish the company in the United States to commercialize advanced lithium-ion battery technology.

Products and positioning

A high-power lithium-ion battery supplier focused on electric transportation, commercial vehicles, and stationary energy storage, with technical emphasis on lithium iron phosphate and nanophosphate chemistry.

Lithium-ion battery technology · 2005
Nanophosphate lithium-ion batteries
A123's principal technology family used doped nanophosphate and lithium iron phosphate chemistry. It was marketed for high power, rapid charging, thermal stability, abuse tolerance, and long cycle life. Applications included vehicle propulsion, commercial transportation, industrial equipment, and stationary energy storage. The product family was later continued under Lithium Werks branding following the sale of A123's Changzhou operations.
Electric transportation batteries
Automotive battery systems
Battery cells, modules, and packs developed for electric and hybrid passenger vehicles. Reported applications included the Fisker Karma, Chevrolet Spark EV, SAIC hybrid and plug-in-hybrid vehicles, and other customer programs. Automotive production became the company's principal strategic focus after the divestment of its grid-storage business and Changzhou operations.
Commercial transportation batteries · 2008
Commercial vehicle battery systems
Battery systems supplied or developed for hybrid buses, electric delivery vehicles, plug-in-hybrid trucks, and other commercial or off-highway applications. Examples associated with A123 technology included Orion VII hybrid buses, Navistar's eStar, Smith Electric Vehicles' Newton, and Eaton or ALTe vehicle programs.
Stationary energy storage · 2008
Grid energy-storage systems
Large battery systems designed for frequency regulation, operating reserves, renewable-energy integration, and substation support. A123 technology was used in projects with AES in the United States and Chile and in demonstrations with Chinese power-equipment companies. NEC acquired this business in 2014.
12-volt automotive battery · 2011
Nanophosphate Engine Start Battery
A lightweight 12-volt engine-start battery introduced as a longer-lasting and lower-weight replacement for lead-acid starter batteries. The product was recognized in the 2011 R&D 100 awards and represented an adjacent automotive application for A123's nanophosphate technology.

Controversies

2015
A123 Systems sues Apple over engineer recruitment
A123 Systems sued Apple, alleging that Apple poached engineers to build a large-scale battery division and that the departures led it to abandon projects. These are allegations in the lawsuit, not findings of wrongdoing.
Source

2010Grid-scale storage deployment with AES
United States · Chile
A123 and AES publicized operating-reserve, frequency-regulation, and renewable-integration projects using A123 battery systems.
Outcome. The projects helped establish A123 as a supplier of utility-scale lithium-ion storage before the grid business was sold to NEC.
Source
2009Michigan advanced-battery manufacturing expansion
United States
A123 promoted the construction of large production facilities in southeast Michigan, supported by federal grants, state incentives, and its broader effort to establish domestic automotive-battery manufacturing.
Outcome. Facilities were built and operated, but demand for automotive batteries later fell below projections and the company entered bankruptcy in 2012.
Source

Brand decisions

2014
Divest grid energy-storage business to NECM&A
Background
A123's post-bankruptcy portfolio was reorganized by business line.
Action taken
NEC purchased the grid energy-storage business.
Aftermath
A123's remaining business became more concentrated on automotive applications.
Reported transaction value. $100 million (March 2014)
Source
2013
Sell principal assets to Wanxiang AmericaM&A
Background
The bankruptcy court required a sale process after A123 could not continue independently.
Action taken
Wanxiang America purchased most A123 assets and established A123Systems, LLC.
Aftermath
A123 continued under Wanxiang ownership, with the government business sold separately to Navitas Systems.
Purchase price for principal assets. $256.6 million (January 2013)
Source
2012
Initiate battery replacement campaignOther
Background
A defect affected battery packs and modules supplied to several customers, including Fisker Automotive.
Action taken
A123 announced replacement of affected packs and modules and estimated the program's cost at approximately $55 million.
Aftermath
The campaign increased financial pressure while customer orders were being reduced.
Estimated recall cost. $55 million (2012)
Source
2012
File for Chapter 11 bankruptcy protectionOther
Background
Lower-than-expected automotive demand, manufacturing costs, customer difficulties, and the battery replacement campaign created severe financial pressure.
Action taken
A123 filed for Chapter 11 protection and placed its assets into a court-supervised sale and restructuring process.
Aftermath
Wanxiang acquired most of the company's assets in 2013, while Navitas Systems acquired the government business.
Reported bankruptcy assets and liabilities. $459.8 million assets; $376 million liabilities (October 2012)
Source
2009
Build domestic automotive-battery capacityStrategy
Background
A123 anticipated rapid growth in electric and plug-in-hybrid vehicle demand and sought to localize production in the United States.
Action taken
The company expanded facilities in Livonia and Romulus, Michigan, using federal and state support.
Aftermath
The facilities provided manufacturing capacity but contributed to fixed-cost pressure when customer demand developed more slowly than forecast.
U.S. Department of Energy grant. $249 million (2009)
Source
2008
Enter utility-scale energy storageStrategy
Background
The company sought applications beyond vehicle batteries for its high-power lithium-ion technology.
Action taken
A123 began supplying battery energy-storage systems for electric-grid and substation uses, including projects with AES.
Aftermath
Grid storage became a significant business line, although NEC later acquired the division in 2014.
Source

Recent events

2015-02
A123 Systems sues Apple over engineer recruitment[2]A123 Systems sues Apple over engineer recruitmentwhittierdailynews.com
Reported: 2015-02-19
A123 Systems sued Apple, alleging that Apple poached engineers to build a large-scale battery division and that the departures led it to abandon projects. These are allegations in the lawsuit, not findings of wrongdoing.

Sources23 sources

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