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A123 Systems got its start in 2001 by licensing nanotechnology from the Massachusetts Institute of Technology. But the road to its success was paved in 2002, when the Department of Energy (DOE) awarded the company a $100,000 SBIR grant.
At the time, the DOE was seeking to develop lithium-ion batteries for electric or hybrid-electric vehicles. The batteries needed to be efficient, cheap, safe under abusive conditions, and environmentally benign. A123’s research evidenced the ability to deliver this breakthrough battery, and, with the help of the SBIR Program, it did. A prototype was built and soon the A123 batteries were making their debut in Black and Decker’s DeWALT 36V power-tool line.
“SBIR funding was critical,” says Bill Mitchell, A123’s vice president of business development.
First, the timing was opportune: It came both very early in the company’s history and when the U.S. market for lithium-ion batteries was nascent. Second, it enabled A123 to demonstrate that its “technology was world-class and could compete with anybody,” says Mitchell.
A123’s first two SBIR awards—a Phase I contract for $100,000 and a Phase II contract for $750,000—were the just the spark the new company needed. As a result, today’s A123 technology is electrifying vehicles everywhere. The company’s customers include passenger carmakers such as Fisker Automotive, BMW, and SAIC Motor, the largest automaker in China, as well as truck and bus makers such as Eaton, Navistar, and BAE Systems. In New York, San Francisco, Toronto, and other cities, transit buses powered by A123 technology have collectively traveled more than 50 million miles.
In 2009, A123’s initial public offering raised almost $400 million. In 2010, the company opened the largest manufacturing plant for lithium-ion batteries in North America. Currently, more than 2200 people around the world call A123 their employer.