Shares Of A123 Systems Soar On Technology News
WALTHAM, Mass. (AP) — Shares of A123 Systems jumped in early trading after the embattled electronic-car battery maker said that it had developed new lithium ion technology capable of operating in extreme heat or cold.
Heat generated by powerful, next-generation batteries is one of the biggest hurdles in developing cars that do not use fossil fuels.
A123 said its Nanophosphate EXT technology is designed to significantly reduce or eliminate the need for costly heating or cooling systems, which should create significant new opportunities for the company.
"We believe Nanophosphate EXT is a game-changing breakthrough that overcomes one of the key limitations of lead acid, standard lithium ion and other advanced batteries," said CEO David Vieau.
A123 expects to begin producing battery cells that include the technology in the first half of 2013.
The news comes just less than two weeks after A123 warned that it may not be able to stay in business unless it's able to secure more financing.
According to a recent filing with the Securities and Exchange Commission, costs related to a recall of defective battery packs could reach $51.6 million. The the Waltham, Mass., company last month changed its revolving credit facility with its lead bank to eliminate its line of credit and provide for up to $15 million as security for letters of credit.
A123, which went public in 2009 and has yet to post a quarterly profit, said that it's trying to raise additional money to fund its operations and looking at other alternatives.
The company has been in talks with potential partners for substantial investments, while it has also looked at ways to raise cash in the capital markets and cut costs.
Shares of A123 Systems Inc. jumped 15 cents, or 14 percent, to $1.19 when the market opened. Over the past year, shares have lost about 80 percent of their value.