A123 signs direct co-development deal with GM for Volt Plug-In

A123 Systems, a Watertown, MA MIT battery start-up spun out of Materials Science Prof. Yet-Ming Chiang's lab, has signed a direct co-development deal with GM to develop batteries for the GM Chevy Volt. Previously, A123's interaction with GM on the project was through Germany's Continental Automotive Systems as a sub-contractor. (See great Tech Review article by Kevin Bullis on this here.)

The new direct relationship appears to indicate a greater belief of GM in A123's technology.

However, A123 has not yet wrapped up the GM Volt battery deal, as there is still one other battery supplier in the hunt alongside it. The other player is Compact Power (Troy, Michigan), a subsidiary of South Korean conglomerate LG Chem.

Interestingly, it appears to be a contest between LiFePO4 cathodes (A123) and LiCoO2 cathodes (Compact Power). LiFePO4 offers much higher safety in that it does not undergo thermal runaway (i.e. heat it up and it won't break down into more reactive components making more heat....) but has a lower energy density than LiCoO2.

Who will win and why?? Weigh in!!