A123 Systems starts to replace Fisker Karma battery packs

Article by Christian Andrei, on March 27, 2012

A123 Systems has started to replace the lithium-ion battery modules and packs that may fail because of a manufacturing defect, a problem that had led to the notorious shutdown of the Fisker Karma luxury sedan while it was being tested by Consumer Reports magazine. A123 said that it found defects in certain cells produced at its plant in suburban Detroit that could result in the premature failure of the battery module or pack that leads to a decrease in performance and reduced battery life, according to CEO David Vieau.

He told reporters during a conference call that this company, which began as a start-up at the Massachusetts Institute of Technology, started to build replacement modules and packs.

It expects to start shipping them to five affected corporate customers this week. Vieau said that A123 hasn’t heard of accidents or injuries due to this defect. He said that safety is unaffected by this defect. But he admitted that the defect was the reason for the shutdown of the Karma electric car last March 7 while it was being tested by consumer magazine Consumer Reports.

A123 anticipates that this replacement will cost around $55 million and that funding will be generated on the next several quarters. Vieau said that the company had enough liquidity for this campaign however the situation is expected to lead to the adjustment of A123's fundraising strategy.

He didn’t indicate the number of modules or packs to be replaced. In a statement, Fisker said that it will improve its existing customer service program to comprise a free battery replacement. It will also extend the North American warranty of the Karma from 50 months/50,000 miles to 60 months/60,000 miles.

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