A123 Systems (AONE) announced last night an additional lithium battery supply deal with Navistar for the Navistar-Modec EV joint venture. It adds to the original lithium battery supply agreement announced in March.
A123 Systems will be manufacturing batteries for Navistar’s eStar electric vehicle which is a commercial use vehicle designed for frequent stops. A number of them have already been shipped to Fed Ex. No word on the financials of either deal, but it is funded in part by the American Recovery and Reinvestment Act.
Shares of AONE are trading up 6% higher in pre-market trading. The stock could certainly use a charge.. it hit a new all time low yesterday at 8.01/share.
It’s lithium business is not presently prospering due to new, low priced Chinese competition, the incipient global depression that is reducing sales of consumer electronics that use lithium batteries, and the new low price of oil that puts lithium powered cars on hold for a while. Nonetheless, a substantial part of SQM’s current capital budget includes funds to expand its lithium production by 25%. That could also prove a depressant to lithium prices in the short term.
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