A123 Systems Surges After Opening Electric-Car Battery Plant in Michigan
A123 Systems Inc., a maker of automotive battery systems, climbed as much as 12 percent after opening a plant to produce lithium-ion electric-car batteries in Michigan.
A123 was up 63 cents, or 8.6 percent, to $7.99 as of 11:54 a.m. in Nasdaq Stock Market composite trading. Shares of the Watertown, Massachusetts-based company, which initially sold for $13.50 a year ago, have dropped 64 percent this year.
President Barack Obama, highlighting his administration’s efforts to encourage battery technology development through last year’s economic stimulus, called Chief Executive Officer David Vieau at the plant in Livonia.
“This is about the birth of an entire new industry in America -- an industry that’s going to be central to the next generation of cars,” Obama said in the phone call, according to a transcript provided by the White House.
A123 last year was awarded $249 million in federal stimulus grants out of $2.4 billion the Obama administration is spending. The company has hired 250 workers and has signed agreements with Navistar International Corp. and Fisker Automotive Inc. to supply advanced batteries for their electric vehicles, the White House said in a statement.
As production increases, A123 expects to employ 3,000 workers at the Livonia plant and at a second Michigan plant that will open next year, according to a White House statement.
A123’s plant in Michigan adds about 600 megawatts of annual electric battery production capacity and will help bring the company’s global total to about 780 megawatts by the end of next year. A123 had originally planned to complete the facility, which is based on processes developed at the Massachusetts Institute of Technology, later this year.
The global market for electric and hybrid electric vehicles was forecast to surge to $21.8 billion by 2015 from about $31.9 million last year largely because of government incentives, according to an analysis by A.T. Kearney. of electric vehicle development.