In some industry-affecting news yesterday, battery cell developer and supplier A123 Systems — being $376 million in debt — defaulted on an interest payment, and subsequently filed for bankruptcy. We saw this coming. But it didn’t take very long for American supplier Johnson Controls to close a $125 million deal to save the company.
On paper, it looks like a huge win for Johnson Controls, who has no battery cell development program that overlaps A123. So not only does Johnson Controls get a specialized lithium-ion battery cell program to supply, it also receives A123’s two factories in Michigan, a factory in China, A123′s chunk of a joint venture with China’s SAIC, and all of A123′s contracts, products and intellectual property.
For those wondering, A123 was the contracted battery cell supplier of two confirmed future products that are set to be released by General Motors in the next year or so: the Chevrolet Spark EV, and the Cadillac ELR, which was recently confirmed to be built in Detroit-Hamtramck with the Chevrolet Volt, which uses a different battery cell supplier.
In short, it seems that those who have been holding out for either model will not have to worry about the products being cancelled, though we have no idea how this business deal will affect GM products further in the pipeline.