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Old 01-12-2012, 07:34 AM   #1
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AONE

Hope you guys are enjoying the new year so far.

Does anyone follow A123 Systems (AONE)? They make Lithium-Ion batteries for electric vehicles and grid storage. The stock has been beaten down recently by politics, cash-burn, etc., but they have announced some deals recently. Also, I believe I read that they'll spend less money this year. (Maybe that was just a yahoo post.) Some of their recognizable customers include GM, Fisker, BMW. They've also received a lot of Gov't money (much like Solyndra, but hopefully w/o the same results).

Solar/wind farms coming online would likely help this stock, as would news of any instability in the middle east. On the flip side, poor electric vehicle sales and stories of EVs catching fire would likely hurt this stock. I'm also concerned about the possibility that this technology might keep getting pushed to the right and fizzle out in favor of some other alternative energy source.

Just wanted to see if anyone else was looking at AONE and had any thoughts/opinions that they were willing to share. I get by on my good looks, not my intellect. So, if you respond, please type slowly to make it easier for me to follow along.

Thanks.
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Old 01-12-2012, 07:51 AM   #2
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I haven't followed them, but my son works for a guy that packages the batteries into different configurations for sport bikes (racing motorcycles) and they have some new deals with AONE recently. His company is ramping up for new products to be released shortly (new configurations for his company, not necessarily new AONE products) and new pricing. They commented that a big problem is fake products that claim to be from AONE are undercuting the real ones. Little intel, for what it is worth
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Old 01-12-2012, 07:53 AM   #3
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Gov't subsidies alone would keep me away, YMMV. As long as you realize you're trying to pick a winner very early in the game, which is difficult in itself. There will probably be a few huge winners, and many more losers when all is said and done.

And it could be years, or decades to pay off. Will the industry take off like PC's did, or remain a niche like PV solar (people have been touting the industry for decades, remains a niche so far).

You've probably already seen this Can A123 Systems Survive? - Forbes
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Old 01-12-2012, 08:45 AM   #4
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Unless someone invents a battery that does not rely on relatively rare metals, or someone discovers a huge supply of those metals, the electric car will never dominate.

With the battery tech currently available, there does not exist a sufficient known supply of the necessary battery metals to build enough electric cars to replace more than a small percentage of ICE cars.
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Old 01-12-2012, 08:56 AM   #5
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I have followed the products, but not the company financials.

As I recall, the difference with the A123 batteries is that they could provide a relatively higher surge current than other lithium designs. They demonstrate this with their drag racers.

However, this has no advantage with real-world usage for EVs. With an EV on 'conventional' lithium batteries, you need enough of them to give you a range of 100-200 miles (or less for a range-extending hybrid like Chevy Volt). Once you have that much energy stored, you have plenty of surge current for acceleration. That is why the Tesla has 200 mile range AND fantastic acceleration.

There may be an application for hybrids: It's no co-incidence that the battery range of the Chevy Volt is ~ 40 miles. I assure you that their first design goal was to have enough batteries for the acceleration they needed when running on batteries alone. Then, they get whatever range they get - it's not that important, as the ICE kicks in. They use the marketing line that X% of trips are under 40 miles, but if the range turned out to be 30 miles, they would just re-state that % for 30 miles.

So, higher surge relative to total energy might help in hybrids, but not EVs.

I can't imagine using this expensive tech for wind farm storage - there are far cheaper ways to achieve that.

Even if lithium batteries take off big time, who's to say that this company will be the 'winner'? Risky bet IMO. But that doesn't mean it won't be a winner, I just don't think there's any way to even guess that.

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Old 01-12-2012, 11:26 PM   #6
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Quote:
Originally Posted by Groovy View Post
Hope you guys are enjoying the new year so far.
Does anyone follow A123 Systems (AONE)? They make Lithium-Ion batteries for electric vehicles and grid storage.
They do Prius EV mods.

The problem is that Toyota won't honor any warranties on a modded Prius, and the mods generally don't pay back unless the EV is charged from photovoltaic or some other alternate-energy source.

So A123's tech may be the world's best, but so far it's not scaling. You may enjoy all the benefits of their products, but I doubt you'll enjoy their stock.
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Old 01-13-2012, 11:21 AM   #7
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emph mine:

Quote:
Originally Posted by Nords View Post
They do Prius EV mods.

The problem is that Toyota won't honor any warranties on a modded Prius, and the mods generally don't pay back unless the EV is charged from photovoltaic or some other alternate-energy source.

So A123's tech may be the world's best, but so far it's not scaling. You may enjoy all the benefits of their products, but I doubt you'll enjoy their stock.
The emph part above doesn't hold. It seems to be common among those promoting EVs and/or PVs (Photo-Voltaic Panels). I discussed this in the Chevy Volt thread.

Using photovoltaic to charge an EV does not make that energy any cheaper than if you didn't use it to charge an EV. In fact, using it to charge an EV might actually cost you $. How's that?

You can't look at the PV/EV in isolation - you can buy the PV regardless of whether you own an EV or not. Let's say your PV panel generates $100 of KWHrs each month, and your EV uses $100 of KWHrs each month. True, no electricity charge for running your EV. But....

If you didn't have an EV, you'd be getting that $100 credit from the utility. So there is still a $100 (opportunity) cost. Now that's a break-even situation - why do I say it could cost you? Here's why...

PV only works during the day obviously. That means you need to be charging your car during the day to use that 'free' energy. Many utilities (esp if you install an EV charger) will provide a Time-Of-Day metering system, with electricity being cheaper at night. So with a PV>EV, you charge your car with relatively expensive KWHrs which could be used to offset that rate on the meter. But, if you just let the PV go to the grid, and charge at night, you are optimizing things. You 'sell' (get credit for) the expensive Kw-hrs and buy the cheaper nighttime Kw-hrs.

Bottom line, the mod has to payback on its own merits, and the PV panel needs to payback on its own merit. You can't (legitimately) double-count the savings (edit: or ignore the opportunity cost).

-ERD50
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Old 01-15-2012, 09:58 AM   #8
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Thanks for the comments. I read the article Midpack posted. A primary concern cited repeatedly pertains to how much money A123 is spending. I think 2012 will require A123 to bring costs down to a manageable level to be able to continue. There is a lot of risk involved, but they've signed some deals w/ some big names despite the risk, which I take as a vote of confidence by those players, although as some of you would likely point out -- at the end of the day it's the bottom line that matters. I guess time well tell. I'll keep watching.

A123 has signed some wind-farm customers. I'm not sure how lucrative the deals are, or how many more might come down the pipeline in the future, but some do exist.

Thanks.
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