A123 Systems Wants To Void Fisker Contract: Fisker Says Not So Fast


The bankruptcy of American battery maker A123 Systems was another blow to President Obama’s green energy loan program. Yet as the consolidation of the battery industry continues, crucial questions are arising about the deals made between battery makers and electric car companies. While A123 wants to void a contract it made with Fisker Automotive, Fisker says that would disrupt the deployment of its plug-in hybrid Karma.

A123 is currently in legal limbo, with competing bids from both Johnson Controls and China’s Wanxiang Group. But the real battle is in bankruptcy court, where A123 wants a judge to void all of its current contracts…including one with Fisker. With 25% of its revenue coming solely from Fisker, it is not much of a leap to imagine that this contract helped usher A123 into bankruptcy.

No doubt, the failure of the electric car market to mature is hurting battery makers including A123, who were hoping for a lot more volume by this time. Fisker’s own sales numbers have been far off from their own projections, but the automaker argues that by voiding the current contract, production of the Karma plug-in hybrid would be stopped. Fisker could not find a replacement battery maker quickly enough to avoid a work stoppage.

That would further hurt the image of Fisker…but it sounds like if A123 Systems is to survive, it simply must void its contract with Fisker. A123 took a big hit when it had to recall and replace defective batteries to Fisker, and while it has contracts with other companies including Black & Decker and Navistar, Fisker was by far its most important client.

I’ll be keeping an eye on this story; it seems to me one company or another is about to get screwed though. Considering both Fisker and A123 Systems received taxpayer money, you can the howling about this bankruptcy is just beginning.

Source: The Truth About Cars

About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.
  • Jason Carpp

    Unfortunately, all the American companies have been screwed in one way or another for the past 4 yrs. I’m hoping things will change for the better in the next 4 yrs, otherwise we’ll cease to be a country. We need American business here in America.

  • TemK

    Seems like there was a rush to produce, but a lack of experience in execution and reliable design? I don’t know if the truth will ever come to light soon, hopefully later.

    • Jason Carpp

      Unfortunately, that seems to be the case. Hopefully things change for the better, sooner rather than later.

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