DETROIT (Reuters) - General Motors Co said on Thursday that it awarded A123 Systems Inc a contract to build battery packs for future electric vehicles, sending A123 shares up more than 40 percent.
A123 previously disclosed that it had a production contract with a major North American automaker. Thursday’s announcement identifies the automaker as GM for the first time.
GM did not detail the specific brands or vehicles. The companies did not disclose the value of the deal.
A123 expects to build thousands or up to tens of thousands of battery packs a year for GM, A123 Systems spokesman Dan Borgasano said. The packs will be assembled at A123’s plant in Livonia, Michigan.
Battery engineering teams at GM have tested and validated A123’s battery chemistry at its lab in Warren, Michigan. Now teams from both companies will together prepare the battery system for production.
“GM is committed to offering a full line of electrified vehicles — each of which calls for different battery specifications,” Micky Bly, GM executive in charge of electric vehicles, said in a statement.
A123 shares shot up 43 percent to $4.52 in early Nasdaq trading. GM shares were up 2 percent to $24.39 on the New York Stock Exchange.
GM went through a government-funded bankruptcy restructuring in 2009 and remains one-third owned by U.S. taxpayers.
The Obama administration also gave A123 a $249 million grant in 2009 to build the Livonia plant, which builds lithium-ion batteries.
Reporting by Deepa Seetharaman, editing by Gerald E. McCormick, Dave Zimmerman