This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

A123 Systems: A Matter of Demand

Updated with closing share price.

The success of A123 Systems (AONE), which had an extremely successful IPO this week , will depend on how big the market for electric-car batteries will be and how much competition the company faces.

On the end-user side, data show that the number of EV (electric vehicle), HEV (hybrid electric vehicle), PHEV (plug-in hybrid electric vehicle) models with an annual production run of at least 20,000 vehicles will grow from 19 models in 2009, to more than 150 models in 2014, and more than 200 models in 2019.

In addition, estimates for the global lithium-ion battery market for automotive application in EVs, PHEVs and HEVs are $31.9 million in 2009 growing to $21.8 billion by 2015 and $74.1 billion by 2020.

After spending most of the day in negative territory, shares of A123 managed to close higher, finishing at $19.63, up 3 cents, or 0.15%, following a debut Thursday that saw the shares rise more than 50%.

A123 uses proprietary nanoscale material technology developed at and licensed from the Massachusetts Institute of Technology. It is also has its 215 employees for R&D on new generations of this core nanophosphate technology. A123 recently developed an ultra high-power battery for the Vodafone McLaren Mercedes team that provides more than 10 times the W/kg (watt hours per kilogram) as compared to a standard Prius battery.

Clearly, the market potential of lithium-ion batteries for automobiles is huge. But cost is a critical factor, and, as they are a new product, so is durability. In a report released in January 2009, the U.S. Department of Enegy pointed out that the current cost of Li-based batteries is approximately a factor of 3-5 too high on a kWh (kilowatt hours) basis for HEVs, and two times too high for HEVs. Also, the ability to attain a 15-year life, or 300,000 HEV cycles, or 5,000 EV cycles are unproven and anticipated to be difficult.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,987.51 -61.49 -0.36%
S&P 500 1,985.54 -11.91 -0.60%
NASDAQ 4,567.5980 -24.2080 -0.53%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs