Lithium ion battery maker, A123 Systems has expanded its partnership with China’s largest car maker, SAIC Motor to help meet rising demand for electric vehicles in country.
The new partnership builds on an existing partnership between the two first established in 2009 which led to the formation of Advanced Traction Battery Systems (ATBS), a battery pack joint venture (JV) company.
As part of the latest agreement the pair will carry out a feasibility study and business plan to jointly develop a battery manufacturing facility in China. The new facility would be designed to serve the local market to help meet growing demand for advance lithium ion technology in the transport sector.
“Since the formation ATBS, A123 has proven to be a strong partner for SAIC, including as the supplier of lithium ion battery systems for three of our electric vehicles—the Roewe 750 hybrid electric sedan, the Roewe 550 plug-in hybrid electric sedan and the Roewe E50 battery electric vehicle,” said Chen Zhixin, executive vice president of SAIC Motor Corp. “We believe there is significant opportunity for A123’s technology across several different markets in China, so expanding our partnership should provide SAIC with an even broader opportunity to benefit from the increasing demand for advanced lithium iron phosphate battery solutions.”
SAIC Motor is the leader in the Chinese auto market. In 2011, SAIC Motor’s total vehicle production exceeded 4 million vehicles for the first time.
The new manufacturing facility be a coating and cell assembly plant to produce A123’s 20Ah prismatic cells, which is expected to create a cost advantage for A123’s technology in the Chinese market. It could help the firms qualify for a variety of incentives and financial support under China’s New Energy Initiative.
SAIC Motor and A123 expect that the definitive agreements for the proposed joint manufacturing facility will be negotiated and completed by the end of September 2012.
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