A123 Systems

A123 Systems represented America's great hope in EV battery manufacturing. The company received $249 million in federal grants and built a Michigan factory to supply automakers. Then the Fisker Karma battery recall hit - A123's cells were defective. The recall cost triggered a liquidity crisis, and A123 filed bankruptcy in 2012. Chinese auto supplier Wanxiang bought the assets for $257 million. A123 demonstrated that manufacturing quality failures in batteries are existential - unlike software bugs, you can't patch physical defects already in customers' cars.