Wednesday, August 8, 2012
Fisker Supplier A123 Systems Gets Chinese Lifeline
In what looks like some good news for Irvine-based electric auto firm Fisker Automotive, the supplier for that firm's electric batteries, A123 Systems, said today that it has signed a memorandum of understanding (MOU) with a Chinese firm, to inject $450M into A123. A123 had been facing major, financial issues all related to the discovery of a issue with its batteries uncovered during testing of Fisker's Karma sedan earlier this year. According to A123, the investment from Wanxiang Group Corporation, China's largest automotive components manufacturer, would allow the company to "continue growing its core business", and would "remove the uncertainty" around its financial situation. A123 had said in a regulatory filing in May that its auditors had "substantial doubt" about the company's ability to continue as a going concern. Fisker uses A123's batteries in its Karma, but received a black eye directly related to A123's battery packs, when testing of the Karma failed a Consumer Reports test in March; those test resulted in Fisker saying it would replace all of the batteries in its cars as a result of the A123 issue.