A123 Systems (NASDAQ:AONE) introducedthe Military 6T Battery, a new lithium battery system suitable for military vehicle applications. The company reported that the 6T battery is a standard form factor suitable for the challenging requirements of a range of military vehicle applications. The lithium battery is the product of a year and a half of research, with input from the United States Army Tank Automotive Research, Development and Engineering Center ( TARDEC). It is designed to easily replace the 6T lead acid batteries currently deployed in military vehicles. There are nearly 800,000 6T batteries currently in use in US military vehicles. In 2010 alone, the military purchased about 300,000 6T batteries, virtually all of which were lead acid. The company believes the battery will enhance stealth functionality and deliver a lighter and more durable system for starting engines. A technical paper written last year noted that replacing lead acid batteries in military vehicles with a lithium battery system could offer a series of benefits. These include doubling the reserve time of the stock battery, and delivering a significantly greater number of charging and discharging cycles while providing weight savings. Additionally, since there is no acid inside the lithium battery to cause corrosion, vehicle deterioration and human contamination from potential chemical or gas spills are eliminated. Possible impacts for lithium producers and exploration companies For lithium investors and industry stakeholders this new development could be interesting given the scale and relatively stable support implied by the potential adoption of a military application for lithium batteries. The US accounts for almost half of all military spending democracies in the world, and its current administration is favorable to policies which promote a greener economy. If a lithium battery was adopted by the US military, the scale might represent a considerable market for lithium products. China is looking to double its military budget, and geopolitical tensions across many regions provide a compelling case for long-term growth of defense- and military-oriented technological developments. An increased demand for lithium products would be realized in higher prices, which could attract investment interest. Attracting capital and the potential for merger and acquisition activity would make junior exploration companies as well as the underlying lithium resources more valuable. Company news Last week, South Korean steelmaker POSCO announced positive results from the company's lithium extraction technology. "The technology developed can make battery grade lithium from brine in a month compared to 12 months at present and has an extraction rate of 80 percent versus the maximum 50 percent under existing processing methods," a Research Institute of Industrial Science and Technology researcher said in the company's press release. Since securing a lithium supply in Bolivia, which holds the world's largest reserves, POSCO has begun planning a lithium extraction plant in the country.