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A123 Systems Sells Grid Energy Storage Business

LIVONIA (WWJ) -- Livonia-based A123 Systems LLC said Monday it had an agreement to sell its grid storage business and other assets in energy storage for the telecom and data storage industries to Japan's NEC Corp.

The company said the sale continues its move toward the transportation market, with an emphasis on so-called "micro hybrid" vehicles, a simpler form of partial vehicle electrification that cuts emissions and boosts fuel economy. A123 is currently producing 12-volt micro-hybrid batteries for three vehicle manufacturers.

A123 also continues to actively serve and grow its customer base in the fields of hybrid, plug-in hybrid and fully electric vehicles globally. With the recent integration of battery production and engineering in Hangzhou, China, which were previously under the management of Wanxiang EV, A123 has expanded its battery technology portfolio to include additional products well suited to the requirements of electric cars and buses.

"Our move to sharpen focus on current and future customers in the global transportation market demonstrates strategic clarity in our business," said A123 CEO Jaosn Forcier. "Our customers and partners around the world will benefit from the organization focusing its R&D strength and system engineering capabilities on clear priorities. We look forward to continued growth as a provider of leading-edge energy storage technology to the world's vehicle manufacturers as they continue to develop the most economical forms of electrification."

NEC intends to incorporate the divested businesses into its Smart Energy Business Unit. The former A123 Energy Solutions facilities in Westborough, Mass. and Chesterfield, Mo. are included in the deal. As part of the transaction, A123 will retain all of its cell manufacturing locations globally, including those in Michigan and China and become a key cell supplier to NEC.

In addition to the transportation business, A123 intends to expand its marketing and distribution of cell products for commercial and industrial applications. The company has formed a new commercial products business unit and will retain its relationships with existing distributors, integrators and value-added resellers of lithium-ion battery cells. A123 already enjoys considerable brand strength in this market and additional investments are planned.

The third pillar of A123's future is its Venture Technologies unit. Established last year, A123 Venture Technologies offers a new model for cooperative development and commercialization of battery technologies by drawing on the R&D resources and experience of the company. A123 Venture Technologies has already become successful in establishing strategic relationships with battery start-ups who are in early development. The unit has also developed an impressive performance record in motorsports and other high performance applications.

A123 Systems LLC is a subsidiary of China's Wanxiang Group. It develops and manufacturers lithium-ion batteries and energy storage systems for transportation and other commercial and industrial applications. The company's proprietary Nanophosphate lithium iron phosphate technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life.

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