A123 Announces Recall, Stock Nosedives 0

A123 (Nasdaq: AONE) had a rocky 2011. 2012 is turning out to have its challenges as well.

The lithium iron battery maker just announced “a field campaign to replace battery modules and packs that may contain defective prismatic cells produced at A123’s Livonia, Mich. manufacturing facility,” according to a release. The “defect has been discovered only in some prismatic cells” built at the firm’s Livonia facility.

A123’s batteries are used in the Fisker EV and this defect is what has caused Fiskers to malfunction in a recent Consumer’s Report test, according to Bloomberg.

Although the lithium-ion battery firm has made some strides in utility-scale energy storage, the company faces a number of challenges with its Fisker Automotive business, as well as rising losses amidst warranty issues and production hiccups. This recall will not help matters.

About a year ago, VC investor Vinod Khosla spoke to about 300 energy storage experts at the annual Energy Storage Association (ESA) meeting and predicted that A123 would not be around in ten years. He cited lithium’s volatility and inherent safety issues. That was less satisfying for the audience (which included A123).

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