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Press Release: USABC AWARDS $8 MILLION ADVANCED BATTERY TECHNOLOGY CONTRACT TO A123 SYSTEMS

SOUTHFIELD, Mich., March 23, 2011 – The United States Advanced Battery Consortium LLC (USABC), an advanced research collaboration among Chrysler Group LLC, Ford Motor Company and General Motors, today announced an $8 million advanced battery development contract with A123 Systems Inc., of Watertown, Mass.

The competitively bid contract award is co-funded by the U.S. Department of Energy (DOE) and includes a 50 percent cost-share by A123 Systems.

USABC awarded the 24-month contract to A123 to continue developing its Nanophosphate® lithium ion battery systems to meet USABC’s target application for a Power-Assist Hybrid Electric Vehicle (PAHEV) Low-Energy Energy Storage System (LEESS). The new LEESS requirements call for a smaller, lighter, lower-cost battery cell with higher regenerative power capability, lower energy and improved cold-crank capability.

USABC is a subsidiary of the United States Council for Automotive Research LLC (USCAR). Enabled by a cooperative agreement with the U.S. Department of Energy (DOE), USABC’s mission is to develop electrochemical energy storage technologies that support commercialization of electric, hybrid electric and fuel cell vehicles. As such, USABC has developed mid- and long-term goals to guide its projects and measure its progress.

“We are pleased to announce the award of this contract to A123 Systems as part of USABC’s broad battery technology research and development programs,” said Steve Zimmer, executive director of USCAR. “These programs are essential to advance the technology needed to meet both near- and long-term goals that will enable a broad spectrum of vehicle electrification.”

The new contract with A123 Systems is the company’s third development contract with USABC. In 2006, USCAR announced a $15 million, 36-month battery development contract with A123 to develop its Nanophosphate® battery technology. A second $12.5 million technology development contract for plug-in hybrid electric applications was announced in 2008.

The U.S. DOE’s overarching mission is to advance the national, economic and energy security of the United States. DOE’s Vehicle Technologies Program works with industry, academia and national laboratories to develop advanced transportation technologies that reduce the nation's use of imported oil and increase its energy security. Electrochemical energy storage has been identified as a critical enabling technology for advanced, fuel-efficient, light and heavy-duty vehicles.

About USCAR

Founded in 1992, USCAR is the collaborative automotive technology organization for Chrysler Group LLC, Ford Motor Company and General Motors. The goal of USCAR is to further strengthen the technology base of the domestic auto industry through cooperative research and development. For more information, visit USCAR’s website at www.uscar.org.

3/23/11                   ###

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