updated 9/13/2010 8:17:28 AM ET 2010-09-13T12:17:28

LIVONIA, Mich., Sept. 13, 2010 (GLOBE NEWSWIRE) -- A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphatelithium ion batteries and systems, today announced the grand opening of the largest lithium ion automotive battery production facility in North America, based on available data. The new plant in Livonia, Mich. is expected to expand A123's manufacturing capabilities by up to 600MW hours per year when fully operational, contributing to the company's plan to expand global final cell assembly capacity to more than 760MW hours annually by the end of 2011. The opening of the Livonia factory comes just over one year after A123 was awarded a $249 million grant from the U.S. Department of Energy (DOE) as part of the American Recovery and Reinvestment Act to help the company execute its strategy to ramp up U.S. manufacturing capabilities to meet increasing, market-driven demand for its innovative technologies.

"The opening of our Livonia facility is a significant milestone and confirms that we are accomplishing our stated objectives that accompanied the DOE grant. Bringing this factory on line in just over a year is a testament to our technology innovation and strategic plan to ramp up manufacturing, but it also speaks to the maturity of the market—without significant customer demand for our products today, a capacity expansion of this magnitude would not be possible," said David Vieau, president and CEO of A123 Systems. "We are grateful to the DOE, the state of Michigan and everyone else who helped make this vision a reality. Over the next several years, we expect to create thousands of jobs in greater Detroit and plan to continue our expansion in the area as we do our part in helping the U.S. emerge as a global leader in the production of advanced lithium ion batteries."

A123 will focus on manufacturing prismatic cells and systems at the new 291,000-square-foot Livonia facility. The factory is designed to enable the complete production process, including research and development, manufacturing of high-value components, cell fabrication, module fabrication and the final assembly of complete battery packs ready for vehicle integration. As part of its continuing U.S. manufacturing ramp up, A123 also plans to open a coating plant in Romulus, Mich., expected to come on line during the first half of 2011. In addition to the DOE grant, the company received $125 million in state incentives from Michigan as part of its 21st Century Jobs Fund to help finance these manufacturing facilities.

"When I signed Michigan's first-in-the-nation battery tax credits into law, it signaled my administration's intent to make our state the advanced battery capital of the world," said Michigan Gov. Jennifer M. Granholm. "This set the stage for the tremendous collaboration between A123, the Department of Energy, the Michigan Economic Development Corporation and state officials that led to this state-of-the-art battery manufacturing facility in Livonia. We applaud A123 for selecting Michigan as the center of its U.S. manufacturing, creating new jobs and helping diversify our economy."

A123's advanced lithium ion batteries and systems are designed to help customers quickly and cost-effectively take game-changing solutions from conception to commercialization. A123 is the first major U.S.-based battery manufacturer to receive TS 16949 certification for its cylindrical lithium ion cells for automotive applications, validating that the company's product design and manufacturing processes meet the highest standards for excellence in the automotive industry. A123's growing list of customers includes BAE, Eaton, Fisker, Navistar, Shanghai Automotive Industry Corporation (SAIC) and other global automakers and heavy-duty vehicle manufacturers. The company's innovative technologies are also being implemented in a wide variety of commercial products, and the company has also delivered more than 20MW of its Smart Grid Stabilization Systems (SGSS) to customers worldwide, making A123 the world's largest producer of lithium ion batteries for ancillary services for the power grid.

About A123 Systems

A123 Systems, Inc. (Nasdaq:AONE) develops and manufactures advanced lithium ion batteries and battery systems for the transportation, electric grid services and commercial markets. Headquartered in Massachusetts and founded in 2001, A123 Systems' proprietary nanoscale electrode technology is built on initial developments from the Massachusetts Institute of Technology. For additional information please visit www.a123systems.com .

The A123 Systems, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6600

Safe Harbor Disclosure

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the expected effect of the Livonia plant on the expansion of A123's manufacturing capabilities, A123's expectations regarding the number of jobs that will be created in Michigan as a result of the plant and A123's plans with respect to additional facilities in Michigan. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are:  delays in manufacturing plant production, customer and market demand for A123's products and services, delays in the development and production of A123's  products, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which A123 operates and other risks detailed in A123 Systems' quarterly  report on Form 10-Q for the quarter ended June 30, 2010 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123's expectations only as of the date of this release and should not be relied upon as reflecting A123's views, expectations or beliefs at any date subsequent to the date of this release.

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