Auto makers aren’t making much money (if any) off of electric cars yet. The same thing is true for the makers of the batteries that will run them. A123 Systems, which provided a shiny example of a stellar cleantech exit in 2009, on Monday reported lower sales and widened its loss for the first quarter.
Revenue hit $18.1 million for the first quarter, down 26 percent from $24.5 million from the year-ago period. A123 posted a loss of $53.6 million, or 51 cents per share, an 85 percent increase from a loss of $29 million, or 28 cents per share, from the same quarter in 2010.
The company made its debut on the Nasdaq in September 2009 with $17 per share and ended the first-day of trading at $20.29 per share. The $371 million IPO was the largest in 2009 and held up as an example of an innovative battery startup in the emerging electric car market.
However, A123’s stock has fallen quite a bit since then and closed at $5.89 per share Monday, before the company announced the earnings. The company has received hefty federal support, including a $249.1 million grant in August 2009 to build a factory in Michigan.
A123 opened that factory only last year and ramped production earlier this year. The company needs to build out that factory to eventually reach 600 megawatt-hours of annual production?
A123’s CEO, David Vieau, said the financial results fell within the company’s expectations. He added that the second quarter will be “an inflection point” for revenue generation because several customers are boosting their production now. The good news he wanted to highlight included the start of production for Fisker Automotive’s first car, the Karma, during the first quarter and a deal to supply 5 kilowatt-hour batteries to Smith Electric Vehicles starting in the second half of this year. A123’s other customers include BMW, Daimler and Navistar.
Developing and building batteries is a capital intensive business, and A123 is up against established players in Japan and Korea, from Panasonic to LG Chem. To support its expansion plans, A123 sold more shares to raise $254 million earlier this year. A123 also is angling for a $230 million loan from the U.S. Department of Energy.
A123 also targets the energy storage market and counts AES Energy Storage among its customers. AES has installed A123 batteries in projects, including a 12 MW project in Chile and AES recently ordered 20 MW of batteries for another project in Chile.