A123 to spend $55M replacing battery equipment

 Shares of A123 Systems tumbled to an all-time low on Monday after the maker of batteries for electric cars estimated that it would spend about $55 million to replace battery modules and packs that might be defective.

 A123 said the problem does not pose a safety threat, but customers' battery equipment could fail early. Five customers — including Fisker Automotive, the company's biggest client — received parts that could have had defective cells, A123 CEO David Vieau said Monday during a conference call.

The $55 million represents as much as one quarter of this year's projected revenue, which A123 has estimated between $230 million and $300 million. The company, which went public in September 2009, has yet to turn a profit.
"I don't think (A123 Systems) is going out of business, but it's a squeaker," said Wunderlich Securities analyst Theodore O'Neill. The company's cash could run short within nine months, O'Neill said.
A123 Systems expects to start shipping replacement packs and modules to affected customers this week. It will cover the cost to replace the equipment over the next several quarters. The company would not identify which customers are affected nor how many batteries in total will be replaced. But in a separate statement Monday, Fisker said it would replace the battery packs for its customers.
O'Neill said the replacement process is so expensive because each battery pack contains more than 300 cells. If just one cell is defective, it can ruin the entire battery pack. So A123 Systems will have to replace a wide swath of batteries, O'Neill said. A123 has sold more than 4,000 batteries to Fisker alone, he estimated.
Vieau said A123 has sufficient cash to pay for the replacements. But the company will likely adjust its fundraising strategy because of the additional cost, he said. Spokeswoman Courtney Kessler said the company wasn't outlining specific ways it might raise more money, but it plans to give an update on the matter during next week's earnings conference call.
A123 said the affected equipment was limited to products made in its Livonia, Mich., factory. It said it has been taking steps to improve its manufacturing process, including the hiring in January of Chief Operating Officer Ed Kopkowski. He was previously a vice president at auto supplier Dana Holding Corp.
Fisker said Monday that it will upgrade customer warranties because of the battery replacement. The new warranty will apply to existing and future 2012 models of the luxury Karma model, which costs about $100,000. Fisker said A123 will replace all affected battery modules and packs for the Karma.
Last month, privately held Fisker recalled the small number of 2012 Karmas it had already sold because of a problem with battery packs made by A123, said Fisker spokesman Roger Ormisher. A faulty hose on the battery pack led to potential coolant leaks.
Fisker has sold about 640 Karmas and 200 to 300 more are on car dealership lots, Ormisher said.
Orders from Fisker have a big impact on A123. Battery sales to Fisker accounted for about $40.7 million of A123's $159.1 million in total revenue in 2011, Wunderlich's O'Neill estimated. The battery maker lowered its full-year revenue outlook late in 2011 after Fisker cut orders for A123's battery packs.
Ormisher said Fisker has no plans to cut orders this year.
Shares of A123 Systems Inc. slid 21 cents, or 12 percent, to close at $1.49, and fell as low as $1.45 during the session. The Waltham, Mass., company went public two-and-a-half years ago at $13.50 per share.
The stock on Monday gave up all its gains from earlier this month, when A123 announced that it would supply Indian automaker Tata Motors with lithium ion battery packs for use in commercial vehicle hybrid electric systems.
General Motors Co. in August chose A123 to produce batteries for use in future electric vehicles. A123 isn't yet supplying batteries to either Tata or General Motors, O'Neill said.

A123 to spend $55M replacing battery equipment

Hybrid cars star of Albany Car Show

 Auto makers are revving up more energy-efficient engines at this year's Albany Car Show. Our Brandon Walker spoke with drivers who say amid rising gas prices, they're happy the auto industry is responding to signs of the times.

 By plugging a chord into what, essentially, is one big socket, your days of waiting in line at the pump are over.It's the new Nissan Leaf, powered by electricity, and sparking lots of attention even some skepticism.

"I'm still on the fence about it a little bit."
But that didn't stop Harold Felt from getting a lesson in how it works. His intrigue is driven by rising prices at the pump.
"I'm not ready to give up the gasoline just yet. At $6 per gallon, maybe," Felt said.
Not quite there yet. AAA reporting the average price for a gallon of Petrol at $3.78--even higher in the capital region.
"A lot of choice for consumers," said Deborah Dorman, president, Eastern New York Coalition of Automotive Retailers.
Auto makers are reacting to consumer demand for more energy efficient cars. That sign of the times on display at the Albany Car Show.

"On one charge it's like 106 miles, and combined if it were gas it would be 99 miles per gallon, which is just really really impressive," said Elias Skiff, as he looked at the Nissan Leaf.
From Toyota, Nissan, Chevrolet, and Ford.
More than 170 vehicles from 32 manufacturers are parked inside the Times Union Center.
"We've got two large cars and we're looking to downsize one of them," said Jeff Pangburn, who's testing a Chevy Malibu with his wife and daughter.
"Trying to get 30 [miles per gallon] on the highway at a minimum. Even the [Honda] CRV, the Honda is getting more now, the equinox. So it's good to see," he said.
And with customers looking to cut back on consumption costs the industry hopes to cash in. A vendor selling electric vehicle charging stations stopped passersby as they checked out cars.

"This is the new infrastructure that's going to have to be out there before people are going to start thinking and purchasing electric vehicles," said Mark Bomba, of Eco Sun and Power, a company that sells charging stations.
Which brings us back to Harold Felt, who's still interested, but won't make a purchase just yet.
"I just need to do a little more homework first," he said.

Fantastic $36,000 Lexus Hybrid Outdrives Prius: Monish.p.m

It may be a Lexus, but you can’t call it luxurious.

Lexus’s five-door, hybrid hatchback, the CT 200h suffers from an identity crisis. No wonder, given its two distinct personalities.

When many people think of a hybrid they picture the Prius. The car nearly constitutes its own brand -- you hardly have to mention that it comes from the Toyota Motor Company. The Prius stands for an age of pragmatism where technology rules over passion.

Nobody would call the Prius a joyful ride; rather its appeal comes from beating the average fuel mileage of 51 city, 48 highway. Consider it an extremely well-executed appliance. (New Prius models are coming, including a bigger wagon version, the V, and an all-electric plug-in.)

Toyota also owns Lexus, whose customers tend to relish their luxury. Vehicles like the $113,000 LS Hybrid sedan focus on indulgence -- the thrill of driving is secondary to the feel of leather. It even has an automated system that helps parallel park the car.

Which makes the 200h all the more confounding. It falls well short of prestige, yet drives way better than a Prius. The 200h’s base price is $29,995, making it the least expensive Lexus. As tested, my Premium model, with options, was $36,725.

Yet I’ve seen Lego sets with less plastic inside, and I was underwhelmed by the busy exterior. While the designers eschewed the weird hump-back of the Prius, they substituted a number of bulges, creases and sloping angles, especially in the rear. Part boy racer, part European hatch. Not so pretty.

Street Wars

Gas mileage falls short of the Prius, but is still fairly fantastic at 43 city, 40 highway. Using the same technology as the Prius, the CT is a full hybrid and can drive up to a mile on battery power alone, without the gas engine switching on.

The 1.8-liter four-cylinder gasoline engine and electric drive motor have a combined 134 horsepower. Drivers can choose just how fully or thriftily to dole out that power, selecting drive modes of EV, eco, normal and sport. Since all the systems are handled electronically, throttle response is dictated by that selection.

The all-battery setting, or EV mode, mostly thwarted me. Even in city driving, I over-accelerated beyond its 28-mph threshold, which kicks the gasoline engine back on. Eco mode slows everything down, allowing only tepid response from the gas pedal.

I imagine this would work quite well around a sleepy island like Martha’s Vineyard off-season, but on the isle of Manhattan it means you’ll be overtaken and boxed out. It’s war out there.

Power Punch

Normal mode suffices. In sport mode, however, the electric motor lends an extra power punch off the line. Which is when the 200h suddenly becomes a bit more interesting -- and perplexing.

Sure, it takes almost 10 seconds to attain 60 mph, so this little hatch isn’t fast, but it pops off the line easily. It’s got a small footprint in every sense, making it easy to flit through traffic and swing into tight parking spaces.

The Mini Cooper rules supreme to many urban dwellers, but the fact that I averaged more than 40 mph, even in the densest traffic, gave the 200h an edge. Around town, it’s almost deceitfully sporty.

(If you want to be less sneaky, you can opt for the F Sport package, which doesn’t improve speed per se, but gets revised suspension tuning, dark alloy wheels and a bigger rear spoiler.)

Plastic Dash

Steering is good, with an appropriate sense of heft at highway speeds and lightness while pulling out of parking spots. The brakes are regenerative, meaning they recapture kinetic energy, but Lexus has made them feel confident and, well, normal.

The $1,100 premium audio package, with 10 speakers, made a pleasure of dawdling in traffic, and the leather seats are the most comfortable I’ve experienced since my all-time-favorite, the buckets in the BMW 7 Series.

Which is where things start unraveling. The interior is otherwise just not up to Lexus quality standards. Most of the dashboard and door siding are the hard plastic you’d find on any economy box -- making the lovely leather-wrapped steering wheel seem out of place.

The center console is overly busy, with a raft of buttons, dials and the small drive selector. The mouse-like controller that operates the navigation system looks like it was glued onto the console.

The navigation screen itself is small with fuzzy graphics. Systems on the latest Kia and Hyundai models are nicer -- and many of those cars are less expensive. Bringing us to the gas mileage. Hyundai has four models that are getting 40 mpg, only one of which is a hybrid.

The CT’s rear seats are tiny and the luggage space scant. I wouldn’t dare invite three friends on a long drive for fear of whining.

On Manhattan streets, though, I’d ditch the Mini Cooper for this ultimate urban runabout.

The 2011 Lexus CT 200h At a Glance

Engine: 1.8-liter four-cylinder and electric drive motor

with combined 134 horsepower.

Transmission: Continuously variable.

Speed: 0 to 60 mph in 9.8 seconds.

Gas mileage per gallon: 43 city; 40 highway.

Price as tested: $36,725.

Best feature: Surprise! It’s sporty.

Worst feature: Short on Lexus luxury; big on plastic.

Target buyer: The urbanite who needs a runabout.

Some Facts About Hybrid Cars In The Early Twenty-First Century

You would almost certainly be surprised to hear that hybrid cars have been with us since the very earliest days of automotive history, but you will not be astonished to be told that the technology has come on in leaps and bounds for the last ten years. In fact, the technology in hybrid cars has reached the level where fuel consumption in a hybrid can be half that of in a conventional internal combustion engine only car.

Half or even less than half under some circumstances like driving in town, especially in heavy traffic. In fact, while a hybrid is either cruising on electric or stopping and starting in thick traffic, there will be no consumption of petrol or diesel whatsoever, which means that you are driving ‘without cost’.
I put without cost in parentheses because a hybrid vehicle is still considerably dearer than a car with a traditional engine. However, even given the added price of a hybrid vehicle, you can save that excess cost over the average life time of the vehicle because of the saving on fuel. Obviously, the higher the cost of fuel, the sooner you will recover your extra initial outlay on the cost of the hybrid.

Perhaps you are thinking that hybrid vehicle manufacturers are profiteering on the backs of car drivers who would like to do their bit for the environment. Well, you would not be alone in thinking that, yet the cost of developing hybrid technology was and still is costly and someone has to account it.
That is you and me, the end-users. Well, that is standard, but in some countries, the government has stepped in to subsidize individuals who purchase a hybrid vehicle, because governments all over the world are under an oath to reduce their country’s carbon footprint.
That means that now is as good a time as any to buy a hybrid vehicle.
There are other reasons why a hybrid is costly though. The hybrid actually has two engines. A hybrid has a traditional engine run on traditional fuels, yet it also has an electric engine which runs off costly batteries. It is not that you have to replace the batteries as with a radio. The batteries are costly because they are very heavy duty rechargeable units.
The technology for recharging these batteries is also ground-breaking. The car uses traditional alternators to recharge them but it also uses braking power to recharge them too. Not just that but the car’s on board computer switches between the two motors automatically, depending on the quantity of power that is needed by the driver.
Keep an eye on the hybrid car market because prices are declining and together with subsidies, the time to buy a hybrid car might come sooner than you imagine.