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A123 announces plans to make battery packs for Tata hybrid buses

A123, the battery company that supplies lithium-ion battery packs for companies such as Fisker Automotive, BMW and General Motors, will produce battery packs for hybrid-electric buses made by Tata Motors, India’s biggest automaker.

The battery packs will be used in Tata’s hybrid city buses starting in the second half of the year, A123 said in a statement today. Tata, which acquired Jaguar Land Rover from Ford in 2008 for $2.3 billion, is boosting its efforts towards electric drivetrains by working on automobile models such as the Vista Indica EV.

For A123, the contract is a bit of good news given that’s staking some of its future on Fisker, for which it supplies battery packs for the Fisker Karma extended-range plug-in luxury sedan. That company has received less than half of its $529 million loan from the U.S. Department of Energy and may forfeit the remainder because of delays in production, though Fisker says it is seeking alternative funding sources.

Tata represents at least the third new battery-making contract for A123 in the past couple of months. In January, A123 said it will make battery packs for BMW’s 3-series and ActiveHybrid 5-series hybrid-electric vehicles. Earlier this year, the company, whose customers also include General Motors, said it would make battery packs for the new Via extended-range plug-in trucks that were unveiled at the Detroit Auto Show in January.

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A123 Systems to Supply Lithium Ion Battery Packs to Tata Motors for Hybrid Electric Transit Busses and other Commercial Vehicles

A123’s Advanced Nanophosphate Battery Systems Designed to Provide Tata with a Cost-Effective Solution for Meeting Performance, Safety and Durability Requirements

Waltham, Mass.-March 1, 2012-A123 Systems (Nasdaq: AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today that it will supply complete lithium ion battery packs to Tata Motors, India’s largest automaker, for Tata’s hybrid electric systems for commercial vehicle applications. A123’s highly scalable battery packs are designed to fit into multiple powertrain architectures that can be implemented into a wide variety of commercial vehicles, providing Tata with a cost-effective solution for meeting its performance, range and durability requirements.

“We consider hybridization to be an integral component of Tata Motor’s overall strategy, and hybridization of our commercial vehicles is particularly important to our global customers for reducing the emissions and increasing fuel efficiency of their fleets,” said Dr Timothy Leverton, Head- Advanced and Product Engineering at Tata Motors. “A123 Systems’ core lithium ion technology has a proven track record of success in the hybrid truck and bus segment, which we believe represents a very significant market opportunity. In addition, the modularity of A123’s pack design enables us to develop a uniform hybrid powertrain architecture that can be deployed across multiple vehicle platforms.”

Initially expected to be deployed on city transit buses during the second half of 2012, A123’s lithium iron phosphate battery packs will be built using the company’s prismatic cell technology, which offers high power capabilities, increased usable energy over a wide state-of-charge (SOC) range, excellent safety and long cycle and calendar life. A123 will deliver complete systems that include robust battery management electronics, and the compact form factor of the prismatic cells enables A123 to design highly-scalable battery packs that are intended to seamlessly configure to Tata’s hybrid electric powertrain architecture.

“The addition of Tata Motors to our growing portfolio of blue-chip customers reinforces our position as the leading provider of lithium ion battery technology for the truck and bus segment,” said Jason Forcier, vice president of the Automotive Solutions Group at A123. “We believe that this announcement further validates the performance attributes of our Nanophosphate lithium iron phosphate technology and underscores our systems integration expertise. A123 understands the value proposition for commercial fleet hybridization, and we believe we can help Tata cost-effectively expand its portfolio of hybrid electric vehicle offerings to allow its customers to take advantage of the long-term benefits of fleet electrification.”

About A123 Systems

A123 Systems, Inc. (Nasdaq: AONE) is a leading developer and manufacturer of advanced lithium ion batteries and energy storage systems for transportation, electric grid and commercial 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. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information please visit www.a123systems.com.

Safe Harbor Disclosure

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the expected launch date of Tata’s hybrid electric commercial vehicles, the anticipated benefits and features of hybridization, Tata’s ability to develop and deploy a uniform hybrid powertrain architecture across multiple vehicle platforms, the ability of A123’s pack design to integrate with Tata’s powertrain architecture, the expected demand for battery modules to be supplied to Tata, and the market for hybrid electric energy transportation in heavy-duty and commercial transportation applications . Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in customer and market demand for and adoption of Tata’s hybrid electric commercial vehicles, delays in the development and delivery of A123’s battery pack products, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which A123 and Tata operate and other risks detailed in A123 Systems’ 10-Q for the quarter ended September 30, 2011 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123’s expectations only as of the date of this release and should not be relied upon as reflecting A123’s views, expectations or beliefs at any date subsequent to the date of this release.

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