Troubled Cleantech Companies Find Salvation in China

Troubled electric-car battery maker A123 Systems, which used a $249 million grant from the U.S. government to build a Michigan factory, is getting rescued by China’s largest auto parts maker in a proposed deal that would give Wanxiang Group an 80 percent stake. It’s only the latest in a series of distressed U.S. cleantech companies snapped up by Chinese investors, and it’s unlikely to be the last.

Demand for electric cars in the U.S. hasn’t lived up to the hype that surrounded the industry three or four years ago, says Kevin See, a senior analyst who tracks the electric vehicle industry at Lux Research in Boston. That has meant trouble for companies like A123. “We’ve seen them really start to fall, one by one,” See says. “The real common link there is that it’s the Chinese companies taking advantage of this.” (A123′s federal grants can be used only to support U.S. manufacturing, the White House told Bloomberg News.)