China's desire to leapfrog traditional automakers with electric vehicles is filling up the order book at A123 Systems.
The Watertown, Mass., battery maker last week said it had won a contract from Shanghai Automotive Industry Corp. to supply lithium ion batteries for a 2012-model EV. A123 already sells battery technology to SAIC for several vehicles.
Jason Forcier, vice president of A123's automotive unit, says the company initially will build cells in Livonia, Mich., but will shift production in 2013 to a plant in China. The cells will be integrated into packs at a Chinese joint venture between A123 and SAIC.
China expects its annual production of electric-drive vehicles to hit 1 million units by 2020, Forcier notes. With Chinese incentives for local production, A123's plants there are a strong selling point. "We're getting inquiries from every OEM in China," Forcier says. "We're also getting inquiries from foreign automakers that sell into China."