The battery maker, which has received $249 million in federal stimulus funds, floated a widely-publicized IPO last year after it landed several contracts to supply its batteries to various customers. The Chrysler deal, which called for A123 to supply batteries for the automaker's electric vehicle models, including the Fiat 500, was also announced with great fanfare.
Details are still sketchy, but A123 chief executive David Vieau said in an earnings call that "a competing vendor (was) willing to buy the business below the current market price in a program which has significantly diminished in scale from our earlier expectation. As a result, A123 has elected to withdraw from this program."
In addition to federal funding, A123 has received backing from the State of Michigan and General Electric. In its second quarter financial report, A123 said the quarter's $34.2 million loss compared with a $21.9 million loss in the previous year's second quarter. Operating expenses for the quarter were $29.6 million.
The Boston-area firm is planning to build plant facilities in Michigan.
In another development in-lithium-ion technology this week, Boston Power Inc. said ASUS International will begin shipping Boston Power's Sonata batteries in ASUS' new line of notebook computers. Boston Power batteries are used in several laptops including in HP models, which advertise the batteries can have a life of three years.
Boston Power is also working with auto manufacturers and has a contract with Saab to develop batteries for electric vehicles.