A123Systems Is Selected As Battery Supplier For BAE Systems Hybrid Propulsion System

WATERTOWN, Mass.--A123Systems, developer and producer of state-of-the-art Automotive Class Lithium Ion^™ batteries, today announced that starting in early 2008, BAE Systems will be offering A123Systems’ lithium ion battery technology as part of its HybriDrive^® propulsion system. BAE Systems’ HybriDrive propulsion system is available on the DaimlerChrysler Orion VII hybrid transit bus. The system is in use in three of the four largest hybrid bus fleets in the world today. The next-generation HybriDrive system featuring A123Systems batteries will be available for commercial buses beginning in 2008.

“By introducing lithium-ion technology to the transit industry, BAE Systems is continuing its nearly decade-long commitment to providing clean and efficient hybrid propulsion,” said Hank McGlynn, Vice President of Vehicle Systems for BAE Systems in Johnson City, New York. “Our lithium ion energy storage system offers better value through longer life, improved performance, and reduced maintenance. It sets a new industry benchmark.”

A123Systems is designing and building turnkey energy storage systems (ESS) specifically for BAE Systems. Built on A123Systems’ Nanophosphate™ chemistry, these packs comprise a power boost component which provides higher specific power, lighter weight and smaller overall volume than the existing battery packs, resulting in a more robust ESS that further reduces emissions in heavy-duty applications. The company’s batteries are significantly smaller and lighter than the previous generation ESS technology typically used in this market and are designed to withstand the heavy duty environments typical of an urban bus drive cycle.

“Our Nanophosphate cells offer a marked performance improvement in power, calendar and cycle life over other battery technologies available today and address the durability and safety required for automotive use,” said David Vieau, president and CEO of A123Systems. “Being selected by the #1 selling heavy duty hybrid propulsion system manufacturer in this fast-growing market is further validation that our battery packs are helping bring hybrid vehicles into the mainstream.”

A123Systems’ Nanophosphate chemistry has been developed with the assistance of the Department of Energy Freedom Car program and is a result of more than $102 million in private investment. With performance validated by various National Labs and automakers, the A123Systems doped Nanophosphate batteries achieve the superior durability and safety required for automotive use of lithium ion technology.

About A123Systems

A123Systems has quickly become one of the world’s leading suppliers of high-power lithium-ion batteries. Based on the company’s patent pending Nanophosphate technology, the batteries deliver previously unattainable levels of power, safety and life. Applicable to a wide range of industries, A123Systems’ products allow OEMs expanded flexibility in system design, removing many traditional technology constraints. Currently, the Company sells millions of battery cells to Black and Decker and Dewalt for use in the most advanced handheld power tools available on the market today. Founded in 2001, A123Systems’ proprietary nanoscale electrode technology is built on initial developments from the Massachusetts Institute of Technology. For additional information please visit www.a123systems.com.