The hot battery maker has a balance sheet problem -- lots of inventory of expensive EV batteries. It looks like the adoption curve for electric vehicles is flatter than anyone thought.
Battery maker A123 was supposed to rev up the electric vehicle revolution. When the company went public in September 2009, Wall Street loved it. But recently, A123 (AONE) has had a hard time pleasing the Street, missing earnings estimates even though it's producing a good product on schedule. Why?
Basically, A123 was ready for customers that couldn't ramp up production of electric cars when they predicted. This meant that A123 couldn't sell the number of batteries they'd hoped in the time frame that they expected to sell them.
"They need to wait for the customers to have their factories up and running before they're ready to sell batteries to customers," says Ben Schuman, a senior research analyst for Pacific Crest Securities who specializes in energy management technologies. More
A storied financier of startups expands -- but its new businesses have yet to take root.
A year ago, when venture capital firm Sequoia Capital ordered its portfolio companies to slash costs in the face of a sick economy, even healthy businesses, such as LinkedIn and Zappos.com, complied.
As word of the edict spread, many non-Sequoia startups also trimmed their budgets -- a testament to the venture firm's influence in Silicon Valley MOREAdam Lashinsky, Sr. Editor at Large - Oct 23, 2009 7:00 AM ET
Conglomerate invests money - and its considerable resources - in young energy firms.
By Marc Gunther, contributing editor
When A123 Systems (AONE), a startup company that makes advanced lithium-ion batteries, had a successful initial public offering last month, one of the big winners was General Electric (GE).
That's because A123 Systems is by far the biggest holding of a venture capital fund run by GE that invests in energy startups. Over six rounds MOREOct 15, 2009 8:00 AM ET
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