The Fiat 500 electric vehicle project, seen as a crucial part of Chrysler’s revival, has hit a stumbling block with the car manufacturer losing its battery supplier.
According to reports in the Detroit Free Press, A123 Systems has withdrawn from the project after reporting a second quarter loss of $34.2million – an increase from its loss of $21.9million just one year earlier.
Katie Hepler, a Chrysler spokeswoman, confirmed that A123 will not be supplying the battery systems for the Fiat 500 electric vehicle commenting that it had been a good development partner and its support has been appreciated.
The original partnership between the companies was announced in March with the plan to produce an undisclosed number of Fiat 500 electric vehicles in 2012 at the Toluca, Mexico, assembly plant.
According to A123 CEO David Vieau, a competing supplier came forward who was willing to “buy the business below current market price in a program that has significantly diminished in scale from our earlier expectation.”
