A123 Systems Secures Three Production Contracts for Lithium Ion Engine Start Battery

WALTHAM, Mass., March 6, 2012 (GLOBE NEWSWIRE) -- A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today announced production contracts for the company's 12V Engine Start Battery with three leading European automakers, including McLaren Automotive for the MP4-12C and a major German OEM that will use the battery in a 2013 model year passenger vehicle. A123's Engine Start Battery is designed as a replacement for absorbent glass mat (AGM) and other lead acid batteries, providing a lighter-weight, longer-lasting solution for micro-hybrid functionality that enhances vehicle performance, improves fuel economy and lowers total cost of ownership. A123 is also developing next-generation designs that are intended to further reduce the cost of its Engine Start Battery to make it applicable to a wider range of vehicle applications.

"The market for micro hybrids is growing rapidly, especially as automakers develop systems to help them meet higher government standards for fleet fuel efficiency. We believe that our lithium ion Engine Start Battery enables OEMs to maximize the performance and improve the fuel economy of their vehicles by providing a move advanced, lighter-weight and longer-lasting replacement for AGM lead acid batteries," said Jason Forcier, vice president of the Automotive Solutions Group at A123. "We are gaining significant momentum in this market through our production contracts with McLaren and two other major European automakers, and we believe that we'll be able to further enhance our solution to enable additional automakers to cost-effectively deploy our Engine Start Battery across a wider range of passenger and commercial vehicles."

According to Lux Research, the global market for micro-hybrids is projected to reach more than 39 million vehicles in 2017 and create a $6.9 billion market for energy storage devices. A123's Engine Start Battery is designed as a drop-in replacement for AGM and other lead acid batteries, leveraging the company's automotive-class lithium ion cells to deliver a number of significant economic, performance and environmental benefits for passenger and commercial vehicle applications, including:

  • Greater Charge Acceptance Rate—A123's lithium ion Engine Start Battery is designed with a greater charge acceptance rate than AGM lead acid, enabling it to charge up to 10 times more quickly and contributing to a fuel economy improvement of 50 percent or greater compared with lead acid as reported by customers.
     
  • Reduced Weight—A123's Engine Start Battery weighs less than half of comparable lead acid batteries, helping to reduce vehicle emissions and enhance driving performance.
     
  • Extended Life—The extended calendar and cycle life inherent to A123's Nanophosphate technology enable the micro hybrid to last at least twice as long as AGM lead acid batteries, resulting in minimal maintenance and lower total cost of ownership.
     
  • Minimal Environmental Impact—A123's Engine Start Battery offers reduced total carbon emissions compared to lead acid and do not contain lead or any other hazardous materials. By replacing lead acid batteries with A123's solutions, customers can reduce the environmental impact of their systems, helping its customers promote their green initiatives and sustainability goals.

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.

The A123 Systems, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6600

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 anticipated features, capabilities, benefits, customer relationships and high volume production of the Engine Start Battery,  the expected demand for the Engine Start Battery, delays in customer deployment of more energy-efficient technologies, delays in the development of next generation designs of the Engine Start Battery, the market for lead acid battery replacement solutions for vehicle applications. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in the development, production and delivery of A123's Engine Start Battery, delays in customer and market demand for and adoption of the Engine Start Battery, adverse economic conditions in general and adverse economic conditions specifically affecting the markets and geographies in which A123 operates, and other risks detailed in A123 Systems' quarterly report on Form 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.

CONTACT: A123 Systems PR Contact:

         A123 Systems

         Dan Borgasano

         617-972-3471

         dborgasano@a123systems.com

         

         Edelman

         Courtney Kessler

         212-277-3720

         courtney.kessler@edelman.com

         

         A123 Systems IR Contact:

         ICR, LLC

         Garo Toomajanian

         617-972-3450

         ir@a123systems.com



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