Bankruptcy Hasn't Stopped A123 Systems, Or Other Green Car Companies

By · May 10, 2013

A123 Systems, once considered the darling of the EV battery industry, went into bankruptcy in October 2012 after a year of struggles and problems. Its primary assets were bought by Wanxiang America Corp., the North American subsidiary of a Chinese auto parts conglomerate. That company is now called B456 Systems Inc.

But what remained of the company has not entirely vanished. It re-emerged this year as A123 Energy Systems, which is pursuing grid-scale energy storage systems. It already has more than 100 megawatts of installed capacity. In addition, another entity known as A123 Ventures was spun off. It works on new ventures, developing related technologies, such as research into materials science and cell chemistry.

This pattern of life, death and rebirth applies not just to A123 Systems, but in varying degrees to other now defunct EV companies, such as Aptera, Azure Dynamics, Coda Automotive, EnerDel, Fisker Automotive, and Think. All these companies ran into financial problems, and used the bankruptcy process to navigate through tough times. Bankruptcy isn't always a point of total destruction. Sometimes companies emerge from bankruptcy, and create great things. The Internet as we know it today was built by many entrepreneurs, and multiple waves of start-up companies, many of whom crashed and burned.

Tales of Death and Rebirth

Even throughout its bankruptcy, A123 never stopped manufacturing and shipping batteries to companies that had placed orders. Batteries were shipped for use in BMW hybrids, the Chevy Spark EV, commercial electric truck customers, and SAIC, the Chinese automaker. A123 was also working with a European automaker on a battery for micro-hybrid cars, based A123 designs of lithium-ion nanophosphate batteries. (Fisker Automotive is not on this list, because it hadn't placed any orders.)

The post-bankruptcy results have been mixed for other EV companies. Aptera, maker of a funky three-wheeled vehicle, ran out of money before it went into production. The company applied for a D.O.E. loan, but was denied because its three-wheel design was technically not a car and didn't qualify under the loan program. The founders of Aptera went on to form other companies, such as Flux Power and Epic Boats. The latter company recently unveiled the TORQ Roadster, an electric sports car (also with three wheels).

Coda Automotive started selling its electric car a year ago, but sales fell well below expectations. By December, the company laid off workers. A couple weeks ago, Coda Holdings entered bankruptcy in order to facilitate a restructuring in which they would exit the automotive business and focus solely on energy storage systems.

EnerDel went into bankruptcy in January 2012, after blaming its difficulties on an electric car market that was slower than expected. Certainly, its partner, Think, which made a small plastic-bodied electric commuter car, was unable to sell many of its cars. EnerDel came out of bankruptcy, and is still in business. On Tuesday, it announced a new product that's tailored for use in Allison hybrid buses. The new product is a drop-in replacement that interfaces with the vehicle’s computer system, and adds more capabilities.

Think went into bankruptcy in June 2011, as the company has done several times before. It was again rescued by an investor group, which intended to restart production of the Think City. That has yet to happen.

Azure Dynamics itself rose from the ac\shes of Solectria, an earlier electric car startup. The company developed an AC powertrain system, and built the electric version of the Ford Transit Connect. In March 2012, the company went into bankruptcy, and soon after Ford stopped production of the electric Transit Connect.

Fisker Automotive had a horrible year during 2012, with recalls, technical problems, and even a few cars catching fire after being flooded by Hurricane Sandy. Sales and production stopped, the company had a series of layoffs, and the co-founder Henrik Fisker left the company. Fisker Automotive appears to be on the verge of bankruptcy. Who knows what will emerge after that?

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