The Boston Globe reports today on an inauspicious end to the battery company A123, at least as an independent entity:

A123 Systems Inc., the Waltham battery maker, said Sunday that it plans to sell nearly all its assets to the North American arm of China’s largest auto parts manufacturer for $256.6 million, pending approval by US Bankruptcy Court and the federal government…

…David Vieau, A123’s chief executive, said he believes A123’s business of developing utility-scale storage for the power grid as well as its research-and-development operations will remain in Massachusetts, and that Wanxiang’s main focus will not be cutting jobs, but reorganizing to advance the company and its technology at a lower rate of spending.

The buyer, Wanxiang, had attempted to invest $450 million in A123, a deal that never transpired as the company ran out of cash too quickly.

A123 has pioneered lithium-ion batteries aimed at use in a number of contexts, including electric vehicles and storage for the electric grid.

There remain a lot of question marks around the future of the company – including what will happen to its U.S. employees – and it’s likely to be a hot topic as A123 received hundreds of millions in loans, subsidies, and tax breaks from federal and state governments.

If you want to learn more, you won’t do better than this primer by The Globe‘s Erin Ailworth, but if you’re still interested, I’ve collected a number of links on the company here. I’ve argued the case that the A123 failure doesn’t disprove the case for government investment in energy companies here.

While I’m not terribly bothered by the idea that a Chinese firm would scoop up the assets of a bankrupt American company that received government support, it is worth noting China’s much stronger commitment to electric vehicles compared to the U.S. In August, I reported on Boston-Power’s big deal in China and wrote about the nation’s aggressive embrace of EV’s.

The U.S. continues to excel in battery innovation, but at some point building a market for those innovations becomes as important as fostering an environment for technical advances. Whereas China is moving rapidly to build such markets, the U.S. political system refuses to do much in that arena.

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