A123 Systems Inc. (Nasdaq: AONE) shares rallied 46.1% to $4.63 Thursday after General Motors Corp. (NYSE: GM) said it signed a supply contract to the battery maker. Volume for A123 was 12.8 million shares, compared to a daily average of 2.7 million.
A story in the Wall Street Journal on August 11 stated that the agreement builds on existing contracts between GM and A123, which focused on lithium-ion battery technology at both the cell and system level. The new contract includes advanced nanophosphate cells and fully integrated electronic components. The specific vehicles and brands will be announced at a later date, according to GM.
Jason Forcier, Vice President of A123’s automotive solutions group, told Dow Jones Newswires the company would get a “substantial revenue stream” out of the program. Yearly unit volume is expected to start in the thousands and could possibly reach the tens of thousands.
Forcier said the contract would cover a vehicle platform that would be launched in the U.S. and abroad, saying demand for fuel-efficient vehicles would continue to increase due to higher fuel costs and increased government standards.
A123 Systems, Inc. develops and manufactures advanced lithium ion batteries and battery systems for the transportation, electric grid services and commercial 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