A123 Systems in Trouble?
We have to admit that we don’t yet have bull confidence in the promised growth of the EV market, seeing as people still have range anxiety, the tech is expensive and the car sometimes very strange.
Upstart companies with big ideas have been popping up like mushrooms after rain, only to go back under due to lack of funding. Some of the ideas they proposed seemed crazy and so we’re not really worried or disappointed.
But when we heard A123 Systems is in trouble, we immediately took notice. You see, this company is crucial to EV makers in America. You see, Fisker is A123 Systems marque customer, but besides the Karma, they also make batteries for the BMW ActiveHybrid 5 and ActiveHybrid 3, as well as the Chevrolet Spark EV.
A stock market analyst for Deutsche Bank switched his recommendation for A123 as he believes the company will have trouble finding capital without equity dilution. Recent quality issues may lead to concerns over AONE’s ability to manufacture with quality at high volumes, potentially leading to customer defections or at least difficulty in procuring new contracts,” Dan Galves, a New York-based analyst at Deutsche Bank, told Boston.com.
A123 Systems was recently forced to make a massive recall for $55 million worth of battery packs after Consumer Reports found a problem with the Fisker Karma in their recent test.
The CEO of the company made an apologetic statement saying it’s a new industry, but the investors must be asking themselves if mass-production of their batteries i viable.