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Research and Markets: New Research Report on A123Systems Released

DUBLIN--Research and Markets (http://www.researchandmarkets.com/research/fdf1ac/a123systems_the_g) has announced the addition of the "A123Systems: The Good, the Bad and the Ugly" report to their offering.

A couple of years ago, Research 2.0 hosted a panel at a prominent technology conference on the West Coast that included David Vieau, CEO of A123Systems. The panel's purpose was to explore the use of nanotechnology in designing and producing innovative batteries and energy storage system solutions. The publisher was intrigued by A123's technology. The company designs, develops, manufactures and sells advanced, rechargeable lithium-ion batteries and battery systems. Its proprietary technology includes nanoscale materials initially developed at and exclusively licensed from the Massachusetts Institute of Technology. A123 owns or exclusively licenses 46 issued patents and more than 200 pending patents worldwide.

A123's management team is positioning the company to provide next-generation energy storage solutions for three major markets: the transportation industry, electric grid services, and the portable power market. The company currently has more than 1,100 employees worldwide. Nearly 20% of the payroll is engaged in R&D activities.

A123 has more than 400,000 square feet of manufacturing facilities in China, Korea and Massachusetts, where it manufactures battery materials, batteries, and battery systems using proprietary, high-volume process technologies. The company also has a manufacturing facility in Livonia, Mich. A123 estimates that its annual manufacturing capacity was approximately 53.8 million watt hours as of March 31, 2008.

KEY POINTS

  • There is strong demand emerging for innovative energy storage products in the global marketplace. The publisher believes A123Systems has compelling nanotech-enabled products to meet a share of that demand.
  • The publisher believes the company's future success hinges on a number of key factors, including its ability to move up the learning curve relatively quickly and drive down production costs.
  • Long product cycles in key markets and patent litigation merit a relatively high risk premium on A123Systems' shares.
  • The publisher believes it will be difficult for A123Systems to play the conventional quarterly earnings game and that senior management needs to focus on generating free cash flow and a positive return on invested capital over time. At this stage A123 represents a call option on electric vehicles and in the best-case scenario could be worth $62 per share. However, their base case is $22, and a very plausible scenario puts the current value closer to $4.

For more information visit http://www.researchandmarkets.com/research/fdf1ac/a123systems_the_g