Tag Archives: li-ion batteries

Wanxiang America wins bid for most of A123 Systems’ assets

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The A123 Systems, Inc., a manufacturer of lithium-ion (Li-ion) batteries, story takes a few more twists and turns. The company declared bankruptcy in Oct. 2012 and announced that it had entered an asset purchase agreement with Johnson Controls. From the A123 Systems About Us webpage,

Asset Purchase Agreement and Chapter 11 Information

On October 16, 2012, A123 Systems, Inc. announced that it has entered into an asset purchase agreement with Johnson Controls, Inc., which plans to acquire A123’s automotive business assets, including all of its automotive technology, products and customer contracts, its facilities in Livonia and Romulus, Mich., its cathode powder manufacturing facilities in China, and A123’s equity interest in Shanghai Advanced Traction Battery Systems Co., Alpha’s joint venture with Shanghai Automotive. The asset purchase agreement also includes provisions through which Johnson Controls intends to license back to A123 certain technology for its grid, commercial and government businesses.

Today, Dec. 10, 2012, there’s a news item on Azonano about A123 Systems’ assets being acquired by Wangxiang America,

A123 Systems, Inc., a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today announced that it has reached agreement on the terms of an asset purchase agreement with Wanxiang America Corporation (“Wanxiang”) through which Wanxiang would acquire substantially all of A123’s assets for $256.6 million.

The agreement was reached following an auction conducted under the supervision of the United States Bankruptcy Court for the District of Delaware (the “Court”). A hearing at which A123 and Wanxiang will seek the required Court approval of the sale is scheduled for Tuesday, December 11, 2012.

According to the terms of the asset purchase agreement, Wanxiang would acquire A123’s automotive, grid and commercial business assets, including all technology, products, customer contracts and U.S. facilities in Michigan, Massachusetts and Missouri; its cathode powder manufacturing operations in China; and its equity interest in Shanghai Advanced Traction Battery Systems Co., A123’s joint venture with Shanghai Automotive. Excluded from the asset purchase agreement with Wanxiang is A123’s Ann Arbor, Mich.-based government business, including all U.S. military contracts, which would be acquired for $2.25 million by Navitas Systems, a Woodridge, Ill.-based provider of energy-enabled system solutions and energy storage products for commercial, industrial and government agency customers.

The Oct. 2012 deal with Johnson Controls seems to have collapsed, which occasioned this December 2012 auction in which Johnson Controls did participate initially. From the Dec. 9, 2012 Johnson Controls news release on PR Newswire,

Johnson Controls officially withdrew from the bankruptcy auction to acquire portions of A123 Systems when it declined to match a higher bid submitted by Wanxiang.  Subsequently A123 representatives have announced they selected Wanxiang’s bid of $257 million as the best offer for the total company over a set of competing complementary bids by Johnson Controls for the automotive and government assets and NEC for the grid and commercial assets.

…

“While A123’s automotive and government assets were complementary to Johnson Controls’ portfolio and aligned with our long-term goals, Wanxiang’s offer was beyond the value of those assets to Johnson Controls,” said Alex Molinaroli, president, Johnson Controls Power Solutions. “Reports by other parties that our proposal involved an elimination of jobs in Michigan are inaccurate.”

The Dec. 10, 2012 news article on Bloomberg Businessweek website provides more detail and some analysis,

Wanxiang is seeking A123’s battery technology, used in Fisker Automotive Inc.’s Karma sedan, as China pushes its companies to develop electric vehicles. An earlier accord with the Chinese company was scrapped in October, when A123 said it filed for bankruptcy protection and agreed to sell its automotive assets to Johnson Controls.

“The purchase of A123 would automatically vault Wanxiang to become probably the number one battery maker in China,” said Shu Sun, a Beijing-based analyst at Bloomberg New Energy Finance. “Technology-wise, no battery company in China is likely to match A123’s products in performance and reliability.”

A123 supplies electric-car batteries to a dozen customers, according Bloomberg New Energy Finance estimates. That’s the highest number of clients in the industry, though LG Chem Ltd. and NEC Corp. (6701)’s venture with Leaf-maker Nissan Motor Co. have higher volume sales, Sun said.

Wanxiang Qianchao Co. (000559), a listed unit of the closely held parent advanced 1.4 percent to 4.25 yuan in Shenzhen trading today, narrowing its loss for the year to 25 percent.

The auction results also pave the way for Hangzhou, China- based Wanxiang to receive A123’s cathode powder plant in China and its share of a joint venture with Shanghai Automotive Industry Corp. called Shanghai Advanced Traction Battery Systems Co., according to yesterday’s statement.

Navitas Systems, a Woodridge, Illinois-based company, will buy A123’s Ann Arbor, Michigan-based government business for $2.25 million, according to the statement.

A123, the recipient of a $249.1 million federal grant, held the auction behind closed doors in the Chicago law offices of Latham & Watkins. The auction began on Dec. 6 with prospective bidders including Johnson Controls, Wanxiang, Siemens AG (SIE) of Germany and Tokyo-based NEC Corp.

As to the why and how of A123 Systems’ bankruptcy in the first place, Dexter Johnson in his Oct. 17, 2012 posting on Nanoclast (on the IEEE [Institute of Electrical and Electronics Engineers] website) suggests it had to do with old fashioned supply and demand economics,

The underlying problems of A123 Systems, Solyndra, and Konarka are not political ones of governmental policies—they’re illustrations of the futility of ignoring good old-fashioned supply-and-demand economics. (Solyndra, besides never being competitive with traditional energy sources, was also forced to compete with heavily subsidized solar alternatives.)

There is little question that A123 Systems made a better Li-ion battery than its competitors. The problem was the nano-enabled battery that they came up with for powering electric vehicles (EVs) was not in competition with other Li-ion batteries, but with the internal combustion engine.

This is not a political issue or an ideological issue, it’s a numbers issue. …

Dexter mentions A123 Systems again in an Oct. 19, 2012 posting (Nanotechnology As Socio-Political Project), featuring a broader analysis of the issues around commercializing technologies. There’s a thesis in here for someone.

ETA Dec. 13, 2012: The US Bankruptcy Court for the District of Delaware has approved the sale of A123 Systems’ military business to Navitas according to a Dec. 13, 2012 news item on Azonano,

Navitas Systems LLC, a leading provider of energy-enabled system solutions and energy storage products for commercial, industrial and government agency customers, today announced that the United States Bankruptcy Court for the District of Delaware (the “Court”) has approved the sale of A123 Systems’ Ann Arbor, Mich.-based government business, including all U.S. military contracts, for $2.3 million to Navitas. …

Navitas Systems can be found here.

Hydro-Québec, graphite, and lithium-ion batteries

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While Dexter Johnson at Nanoclast blog writes about an investigation into why the storage capacity of lithium-ion (Li-ion) batteries degrades in his Nov. 26, 2012 posting (Newly Developed Live Nanoscale Imaging Technique Promises Improvement in Li-ion Batteries), Hydro-Québec and Grafoid Inc. have signed a development deal for the next generation of lithium iron phosphate materials to be combined with graphene for next generation rechargeable batteries. From the Nov. 27, 2012 news item on Nanowerk,

The 50-50 collaborative agreement sets out terms with the objective of creating patentable inventions by combining graphene, supplied by Grafoid, with Hydro-Québec’s patented lithium iron phosphate technologies.

Two key, specific commercial target markets – the rechargeable automobile battery sectors and batteries for mobile electronic devices used in smartphones, computing tablets and laptop computers – were identified in the agreement.

Hydro-Québec will study Grafoid’s graphene conductivity, electrochemical performance and its effects in electrode formulations, electrolyte and separator optimizations. Detailed characterizations of Grafoid’s supplied materials will be undertaken at IREQ’s cutting edge facilities using its advanced electron microscopy, spectrographic and other in-house technologies.

Hydro-Québec will also supply lithium iron phosphate materials and its electrochemistry know how which it acquired under license from famed American inventor Dr. John Goodenough.

The Nov. 26, 2012 news release from Focus Graphite, which originated the news item, provides additional detail about the various principles in the deal,

About Focus Graphite

Focus Graphite Inc. is an emerging mid-tier junior mining development company, a technology solutions supplier and a business innovator. Focus is the owner of the Lac Knife graphite deposit located in the Côte-Nord region of northeastern Québec. The Lac Knife project hosts a NI 43-101 compliant Measured and Indicated mineral resource of 4.972 Mt grading 15.7% carbon as crystalline graphite with an additional Inferred mineral resource of 3.000 Mt grading 15.6% crystalline graphite  Focus’ goal is to assume an industry leadership position by becoming a low-cost producer of technology-grade graphite. On October 29th, 2012 the Company released the results of a Preliminary Economic Analysis (“PEA”) of the Lac Knife project which demonstrates that the project has robust economics and excellent potential to become a profitable producer of graphite.  As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Graphite is also investing in the development of graphene applications and patents through Grafoid Inc.

About Grafoid Inc.

Grafoid, Inc. is a privately held Canadian corporation investing in graphene applications and economically scalable production processes for graphene and graphene derivatives from raw, unprocessed, graphite ore. Focus Graphite Inc., (TSX-V: FMS; OTCQX: FCSMF; FSE: FKC) holds a 40% interest in Grafoid Inc. [emphasis mine]

About IREQ

Hydro-Québec’s research institute, IREQ, is a global leader in the development of advanced materials for battery manufacturing and creates leading edge processes from its state of the art facilities. IREQ holds more than 100 patent rights and has issued over 40 licenses for battery materials to some of the world’s most successful battery manufacturers and materials suppliers. Its areas of expertise include energy storage and IREQ is a lead partner with private sector companies in Québec to build EV and HEV charging stations in support of its technology developments. Its material development contributions are helping to develop safe, high-performance lithium ion batteries that can be charged more quickly and a greater number of times. IREQ promotes open innovation and partners with private firms, universities, government agencies and research centers in Québec and abroad. Its partnerships allow IREQ to develop, industrialize and market technologies resulting from those innovation projects.

About Hydro-Québec

Hydro-Québec is Canada’s largest electricity producer among the world’s largest hydroelectric power producers and a public utility that generates, transmits and distributes electricity. Its sole shareholder is the Québec government. It primarily exploits renewable generating options, in particular hydropower, and supports the development of wind energy through purchases from independent power producers. Its research institute, IREQ, conducts R&D in energy efficiency, energy storage and other energy-related fields. Hydro-Québec invests more than $100 million per year in research.

Here’s one last bit I want to highlight from the Focus Graphite news release,

“Commercially, and ultimately, our technology development partnership with Hydro-Québec aims to produce high capacity, LFP-graphene batteries with ultra short charging times and longer recyclable lifetimes,” Mr. Economo said [Gary Economo, President and Chief Executive Officer of both Grafoid Inc. and Focus Graphite].

He said the parties chose to focus their collaboration on LFP-graphene batteries and materials because of their short-term-to-market potential.

In light of Dexter’s very informative posting about Li-ion batteries and the investigation into why the storage capatcity degrades, I find this Hydro-Québec/Grafoid Inc. development provides insight into the relationship between scientific research and business and insight into the risks as the various groups compete to bring products to market or to improve those products such that they come to dominate the market.

One last comment, graphite flakes are also mined in Ontario as per both my July 25, 2011 posting and my Feb. 6, 2012 posting about Northern Graphite Corporation and its Bissett Creek mine.