A123 Systems Secures Three Production Contracts for Lithium Ion Engine Start Battery

A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today announced production contracts for the company's 12V Engine Start Battery with three leading European automakers, including McLaren Automotive for the MP4-12C and a major German OEM that will use the battery in a 2013 model year passenger vehicle . A123's Engine Start Battery is designed as a replacement for absorbent glass mat (AGM) and other lead acid batteries, providing a lighter-weight, longer-lasting solution for micro-hybrid functionality that enhances vehicle performance, improves fuel economy and lowers total cost of ownership. A123 is also developing next-generation designs that are intended to further reduce the cost of its Engine Start Battery to make it applicable to a wider range of vehicle applications.

"The market for micro hybrids is growing rapidly, especially as automakers develop systems to help them meet higher government standards for fleet fuel efficiency. We believe that our lithium ion Engine Start Battery enables OEMs to maximize the performance and improve the fuel economy of their vehicles by providing a move advanced, lighter-weight and longer-lasting replacement for AGM lead acid batteries," said Jason Forcier, vice president of the Automotive Solutions Group at A123. "We are gaining significant momentum in this market through our production contracts with McLaren and two other major European automakers, and we believe that we'll be able to further enhance our solution to enable additional automakers to cost-effectively deploy our Engine Start Battery across a wider range of passenger and commercial vehicles."

According to Lux Research, the global market for micro-hybrids is projected to reach more than 39 million vehicles in 2017 and create a $6.9 billion market for energy storage devices. A123's Engine Start Battery is designed as a drop-in replacement for AGM and other lead acid batteries, leveraging the company's automotive-class lithium ion cells to deliver a number of significant economic, performance and environmental benefits for passenger and commercial vehicle applications, including:

• Greater Charge Acceptance Rate —A123's lithium ion Engine Start Battery is designed with a greater charge acceptance rate than AGM lead acid, enabling it to charge up to 10 times more quickly and contributing to a fuel economy improvement of 50 percent or greater compared with lead acid as reported by customers.
  
   


• Reduced Weight —A123's Engine Start Battery weighs less than half of comparable lead acid batteries, helping to reduce vehicle emissions and enhance driving performance.
  
   


• Extended Life —The extended calendar and cycle life inherent to A123's Nanophosphate technology enable the micro hybrid to last at least twice as long as AGM lead acid batteries, resulting in minimal maintenance and lower total cost of ownership.
  
   


• Minimal Environmental Impact —A123's Engine Start Battery offers reduced total carbon emissions compared to lead acid and do not contain lead or any other hazardous materials. By replacing lead acid batteries with A123's solutions, customers can reduce the environmental impact of their systems, helping its customers promote their green initiatives and sustainability goals.