A123 Systems Signs Multi-Year Li-ion Battery System Supply Agreement With Fisker Automotive, Intends to Invest Up To $23M in Fisker

A123 Systems scored big with this contract with Fisker. Let's hope their battery packs exceed expectations.

From Green Car Congress:

A123 Systems has entered a battery supply agreement with Fisker Automotive to supply battery systems for the Fisker Karma Plug-in Hybrid Electric Vehicle (PHEV). The Karma—an extended-range electric vehicle—is scheduled to be launched in late 2010.

Fisker had signed a letter of intent for a potential long-term battery supply agreement with Ener1’s EnerDel in May 2009 (earlier post), and Fisker CEO Henrik Fisker had said in December 2009 at the LA Auto Show that the company would announce a battery supplier by the end of the year. Yesterday, Ener1 filed a form 8-K (Report of unscheduled material events or corporate changes) with the SEC stating that the two companies had ceased discussions with respect to the feasibility of a business relationship concerning the Fisker Karma vehicle program.

The multi-year agreement provides that A123 is the selected battery system supplier for the Fisker Karma. A123 plans to manufacture the cells and systems at its Livonia, Mich. facility with production slated to commence later this year.

Under the new agreement, A123 Systems will also collaborate on Fisker’s Project Nina platform—its next-generation of lower-cost plug-in hybrids—with the intent of having A123 supply batteries for that vehicle based on meeting the automaker’s performance and delivery requirements. Project Nina is expected to launch in 2012.

Fisker Automotive selected A123 because of the company’s ability to meet our performance needs and rapidly scale to our production volume. Fisker is committed to developing environmentally friendly cars that don’t sacrifice style or performance. A123’s technology will ensure the Karma delivers.

—Henrik Fisker, Chief Executive Officer of Fisker Automotive

The Fisker Karma is expected to have a range of 50 full-electric miles on a charge and a total range of 300 miles with an on-board generator turned by a 2.0L direct injection Ecotec gasoline engine from GM (earlier post). The Karma features 403 hp (300 kW) and is designed to go from 0 to 60 mph in about six seconds, reaching a top speed of 125 mph (201 km/h).

In September 2009, the US Department of Energy awarded a $528.7-million conditional loan to Fisker Automotive for the development of two lines of plug-in hybrids—the Karma and the new Project Nina vehicle—by 2016. (Earlier post.)

Investment. In addition to entering into the supply agreement, A123 also announced its intent to invest up to $23 million in Fisker Automotive’s current funding round in order to establish a strategic relationship with the car company.

The contemplated investment would consist of $13 million in cash and $10 million in A123 common stock and would be subject to the completion of certain terms and conditions. This investment would closely align the interests of both companies in delivering innovative technologies for safe and reliable PHEVs. This investment would also allow Fisker Automotive and A123 to work closely together to optimize the performance of future vehicles, they said.