Shares of A123 Systems, Inc.(NASDAQ:AONE) were up 36.63% to $0.750 after slumping 80% in the past couple of trading sessions.
A123 Systems, Inc.(NASDAQ:AONE), electric car battery maker, which filed for bankruptcy this week, has been held up by Republicans as a failure of the economic policies of the Obama Administration.
According to an analysis done by Bloomberg, while the company had marquee customers and a promising future, its problems were a result of its missteps in manufacturing.
About three years back the Obama administration had pledged nearly $250 million in grants to provide financial help and also to assist it in bringing back jobs and factories back to the U.S.
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Bloomberg said that the company had produced faulty batteries "that forced its main customer, Fisker Automotive Inc., to recall hundreds of $103,000 cars."
However the technology owned by the company will not disappear as Johnson Controls, an auto parts maker, has offered to buy A123's auto-battery business.
"The bankruptcy followed A123’s attempt to sell a controlling stake to a Chinese company, an effort that fell apart amid scrutiny by congressional Republicans. The offer from Johnson Controls has to be approved by a U.S. Bankruptcy Court and could be topped by a rival bidder," Bloomberg said in its analysis.
In the U.S. there are too many electric car battery makers while the demand for electric cars is low, people still preferring to drive around in gasoline-guzzling more powerful vehicles.
However considering the backing that A123 got with the government, it surprised many that the company still went under.