Electric Car Battery Manufacturing Giant Fails

Bloomberg have reported on the collapse into administration of the US-based Electric Car Battery manufacturer, A123 Systems Inc. (http://www.a123systems.com/)

On a political level, it has exposed the policy of governments picking industrial winners, the company having received around $249M USD in funding stimuli from the Obama administration. On a product level it has shown technical frailties, with product recalls, and marketing weakness with demand not generating the revenues to stave off administration. It looks like assets will pass to Johnson Controls International (JCI), a maker of automotive batteries, amongst other interest, and potentially allow it to dominate this sector in the US. There is a long way to go before demand and technology give the benefits politicians would like to see derived from battery powered cars.  We will keep you posted.