AUBURN HILLS, Mich. (AP) -- Chrysler LLC said Monday that a Massachusetts-based company will supply the batteries for the automaker's first-generation electric cars scheduled to go on sale next year.
Chrysler said A123Systems in Watertown, Mass., will supply the lithium-ion batteries for the company's extended-range gas-electric cars and its all-electric cars.
Chrysler has shown off five different electric-drive vehicles developed by its high-tech ENVI unit and said it plans to start selling one of the five models next year.
ENVI President Lou Rhodes says the financial troubles at Chrysler have not slowed the company's plans to bring electric vehicles to market. Chrysler has received $4 billion in government aid since the start of the year. A week ago, President Barack Obama and his auto task force gave the ailing automaker 30 days to cement a partnership with Italian auto company Fiat SpA in order to receive additional aid, or be forced into bankruptcy. It must also negotiate concessions from debt holders and the United Auto Workers union.
A123Systems, a spinout of research from the Massachusetts Institute of Technology, said it would produce the batteries at a new facility in Michigan. The company has more than 400,000 square feet of manufacturing space in China, Korea and Massachusetts. In January, the company said it applied for $1.84 billion in funding from the Department of Energy to support build-out of the Michigan plant.
Michigan Gov. Jennifer Granholm signed a bill into law Monday adding $200 million to the state's tax incentive program for companies developing and making advanced batteries used in hybrid and electric vehicles. The initiative started earlier this year with refundable tax credits worth up to $335 million.
Granholm says Michigan's initiative is more aggressive than any other state's plan.
A123 Systems was in the running for a battery contract with General Motors Corp. for the Chevrolet Volt. GM is partnering with LG Chem Ltd. of South Korea for its batteries.