A123 Systems and SAIC Motor to expand Li-ion partnership in China; evaluating new plant for local manufacturing of 20 Ah prismatic cells

A123 Systems plans to expand its partnership with SAIC Motor Corporation Limited (SAIC Motor), the largest automaker in China. This announcement builds on the existing partnership between A123 and SAIC Motor that was established in 2009 with the formation of Advanced Traction Battery Systems (ATBS), a battery pack joint venture (JV) company.

Under a new framework agreement, A123 and SAIC Motor are carrying out a feasibility study to define the business plan and required investment for a jointly developed battery manufacturing facility in China in support of ATBS. SAIC and A123 are evaluating the feasibility of a manufacturing JV to build a coating and cell assembly facility in China that will produce A123’s 20Ah prismatic cells, which is expected to create a cost advantage for A123’s technology in the Chinese market.

The proposed manufacturing facility is expected to serve the local market, with an initial focus on transportation, enabling A123 to more quickly and cost-effectively meet increasing demand for advanced lithium ion battery technology.

Additionally, this is expected to substantially increase the local content of systems produced by the A123/SAIC partnership, helping to qualify the output for a variety of incentives and other financial support under China’s New Energy Initiative.

SAIC Motor and A123 expect that the definitive agreements setting forth the terms and conditions regarding the proposed joint manufacturing facility and its operations will be negotiated and completed by the end of September 2012.

Since the formation of ATBS, A123 has proven to be a strong partner for SAIC, including as the supplier of lithium-ion battery systems for three of our electric vehicles: the Roewe 750 hybrid electric sedan, the Roewe 550 plug-in hybrid electric sedan and the Roewe E50 battery electric vehicle.

We believe there is significant opportunity for A123’s technology across several different markets in China, so expanding our partnership should provide SAIC with an even broader opportunity to benefit from the increasing demand for advanced lithium iron phosphate battery solutions.

—Chen Zhixin, executive vice president of SAIC Motor Corp.

SAIC Motor is the leader in the Chinese auto market and holds the country’s top market share when considering the output of its joint ventures with General Motors and Volkswagen among others. In 2011, SAIC Motor’s total vehicle production exceeded 4 million vehicles for the first time.

Through our partnership with SAIC Motor, A123 has made significant progress in entering China’s passenger and commercial vehicle segments. In the automotive industry, it is advantageous to establish manufacturing operations in close proximity to the customer base, so we believe ramping up a manufacturing facility in China will help us bring our solutions to market more quickly and cost-effectively to capitalize on increasing demand.

—Jason Forcier, vice president of the Automotive Solutions Group at A123 Systems

Source: Green Car Congress

VW will start making electric vehicles in China in 2014

Volkswagen will start making electric vehicles in China in 2014 and will reach full EV-production capacity four years later, Reuters is reporting, citing VW China operations chief Karl-Thomas Neumann, who was speaking at a Beijing convention.

The German automaker, which has partnerships with China's FAW Group and SAIC Motor Corp., will also debut its first plug-in hybrid-electric vehicle in China in 2015. Neumann said EVs are "desperately needed" in China, the wire service said.

VW is banking on EV demand from a country expected to eventually overtake both the U.S. and Europe when it comes to electric-vehicle demand. Green research firm Pike Research said last year that Asia-Pacific will account for about 617,000 annual sales within five years, almost the number annually sold in North America by that time.

China is VW's largest market, accounting for more than a quarter of the automaker's vehicle sales in 2011. Last year, VW sold 2.26 million vehicles in China, up 18 percent from a year earlier.

In September, China Car Times reported that Volkswagen's Shanghai unit will launch an electric vehicle-only sub-brand with called Tantos, whose first EV model will be the E-Lavida. VW reportedly will likely have another EV-only badge called Kai-Li.