# Why A123 Systems Failed



## PhantomPholly (Aug 20, 2008)

A123 failed because of a bad business model encouraged by government money, not because the technology was "not good enough."

Had they tried a simpler business model - say, making better cathodes or anodes, or even simply manufacturing their powder, or even just licensing their technology - it might well have been a different story. They also might have received venture capital from folks who know more about what a good business model looks like...


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## Jason Lattimer (Dec 27, 2008)

Anytime you have a product that is subsidized by the government you don't go after all the sales you can get. So they decided they would not sell their product to us. The only wanted O.E.M.s to buy their product and when they didn't, surprise surprise, they go bankrupt.


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## Ziggythewiz (May 16, 2010)

You can't survive on one primary customer. Especially when they're also propped up by govt, have no business model, and suck as much as the Karma.


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## PhantomPholly (Aug 20, 2008)

If making the powder would have been a risk level of "1", then making cathodes might have been a risk factor of "10" while trying to compete globally with established battery manufacturers was a risk factor of around 1,000.

The key scientist was expert on his powder. He MAY have done well designing a process to create anodes or cathodes (don't recall which the powder was used on), but then again he may not have done so well. He knew nothing about making batteries.

Bad business model.


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## Genius Pooh (Dec 23, 2011)

Hmmm Is it Okay, Buying A123 systems module?

It's still one of good high C-Rate lifo....

and cheap...

I hope they get better and overcome this situations


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