05/16/2012 2 Comments
Remember all those hybrids on the way to a spontaneous road side or a garage fire? It appears some may of had some bad batteries. The MIT Technology Review has some of the details:
The financial numbers are pointing in the wrong direction for lithium-ion battery maker A123 Systems, a company founded 10 years ago based on technology developed at an MIT lab.
In its most recent quarter, A123 posted a net loss of $125 million, $40 million more than it lost in the previous quarter. It only brought in $11 million in revenue, down from $40 million in the previous quarter and $18 million a year ago. Meanwhile, its cash is dwindling, down from $187 million at the end of last year to $113 million at the end of the first quarter of this year. The situation is so bad that A123’s auditors have expressed doubt about the company’s ability to stay afloat as a “going concern.”
A123’s poor performance is due largely to the fact that it has to replace a large number of defective battery packs it sold to customers last year. Although these costs will be incurred over a few quarters, A123’s accountants lumped all the battery replacement costs together in this earnings statement. Even without its warranty issues, however, A123 might still be struggling. Its manufacturing costs are high, so the company loses money on every battery it sells. It loses as much as 57 cents per dollar of revenue from its sales to one customer, estimates Andrea James, an analyst for Dougherty.
You can read the rest of the story HERE.
Another green company that cannot survive without government subsidies to pick up the tab and the government is broke. What next? Wind powered cars?