A123 Plans Chinese Car Battery Venture - TheStreet

WATERTOWN, Mass. (

TheStreet

) --

A123 Systems

(AONE)

plans a joint venture with

SAIC Motor

to develop batteries for use in hybrid and electric vehicles in China.

A123 Systems will own 49% of the venture, while China's SAIC Motor will own 51%. The venture will be managed equally by both companies.

"As part of this partnership we look forward to building a team of outstanding employees to develop innovative battery technologies that we expect will be included in some of the highest quality hybrid and electric vehicles anywhere in the world," said David Vieau, CEO of A123 Systems, in a statement Thursday.

The new venture -- Shanghai Advanced Traction Battery Systems -- will seek to develop business throughout China, the world's biggest market for automobiles, and position A123 to gain market share.

The venture will be the preferred supplier of complete energy storage systems for all hybrid electric and pure electric vehicles made by SAIC. A123 Systems will supply the advanced automotive battery cells.

The venture has received a contract to supply battery systems for SAIC Motor's plug-in hybrid vehicle program.

SAIC is using A123 battery cells in its own-brand autos, including the hybrid Roewe 750 and a plug-in version of the Roewe 550.

SAIC recently obtained a majority 51% stake in its main China joint venture with

General Motors

, Shanghai GM. A123 already is a supplier to GM.

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-- Reported by Joseph Woelfel in New York.

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