A123 Systems to make lithium ion batteries for Navistar electric vehicles

A123 Systems (Nasdaq: AONE), a developer and manufacturer of advanced Nanophosphate™ lithium ion batteries and systems, announced a production agreement with Navistar, Inc., a proven leader in worldwide commercial transportation, to supply lithium ion battery systems for electric vehicles (EVs) for the Navistar-ModecModec EV Alliance, LLC, a joint venture between Navistar and Modec Limited of the U.K.

According to the supply agreement, which builds upon an earlier development agreement that was announced in March 2010, A123 will manufacture battery systems for Navistar’s eStar electric delivery vehicledelivery vehicle at its Livonia, Michigan facility. A number of vehicles have already been shipped to Federal Express as part of the earlier development agreement.

The work is partially funded by American Recovery and Reinvestment ActAmerican Recovery and Reinvestment Act (ARRA) funding, administered by the U.S. Department of Energy.

Rather than converting an existing, conventional fossil fuel powered truck, Navistar’s eStar truck is a commercial electric vehicle that is purpose-built to be electric as it balances the needs of business and the environment. With zero tailpipe emissions, the Navistar electric vehicle can potentially reduce greenhouse gas emissions by as much as 10 tons annually, when compared to an equivalent diesel-powered vehicle.

The Navistar electric vehicle has a Gross Vehicle Weight (GVW) rating of 12,100 pounds and a payload capacity of two tons. The vehicle will be assembled in Wakarusa, Indiana, and is scheduled for launch in mid-2010.

A123’s battery pack will enable the Navistar electric vehicle to travel a distance of approximately 100 miles on pure electricity before needing to be recharged. The battery pack will be capable of a rapid charge rate and will have a charge time dependent on the power of the charging system applied.

A123 Systems, Inc. (Nasdaq: AONE) develops and manufactures advanced lithium ion batteries and battery systems for the transportation, electric grid services and consumer markets. Headquartered in Massachusetts and founded in 2001, A123 Systems’ proprietary nanoscale electrode technology is built on initial developments from the Massachusetts Institute of Technology.

Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International® brand commercial and military trucks, MaxxForce® brand diesel engines, IC Bus™ brand school and commercial buses, Monaco® RV brands of recreational vehicles, and Workhorse® brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine service parts. Another affiliate offers financing services.