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A123, Shanghai Autos Form Battery Venture

General Motors partner SAIC Motor Corp. and A123 Systems Inc. said they plan a joint venture in China to supply batteries for electric and hybrid vehicles.

SHANGHAI (AP) -- A123 Systems Inc. and General Motors Co. partner SAIC Motor Corp. said Thursday they plan a joint venture in China to supply batteries for electric and hybrid vehicles.

Watertown, Mass.-based A123 already is a supplier to GM. The deal with SAIC, one of China's biggest automakers, extends that cooperation in China, the world's biggest auto market.

State-owned SAIC will hold a 51 percent stake in the joint venture, which will focus on developing battery systems for electric and hybrid cars, trucks and buses, A123 said in a statement. It gave no financial details.

"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," David Vieau, CEO of A123 Systems, said in the statement.

The new venture, called Shanghai Advanced Traction Battery Systems Co., will be the main supplier for all hybrid and pure electric vehicles made by SAIC Motor and its subsidiaries. But it will also seek to expand its share in the market for electric vehicle battery systems, it said.

A123 Systems will hold 49 percent in venture and share management duties equally with SAIC, the statement said.

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.

Founded in 2001, A123 Systems was funded initially by a $100,000 grant from the U.S. Department of Energy to commercialize technology developed at the Massachusetts Institute of Technology. Its customers also include Chrysler, Delphi, AES Energy Storage and Black & Decker Corp.

SAIC recently obtained a majority 51 percent stake in its main China joint venture with GM, Shanghai GM, as part of a deal that calls for the Chinese partner to invest up to $350 million in a venture aimed at expanding in the Indian auto market.