As more and more hybrid and electric vehicles are announced and make their way to the U.S. market, there is an increasing demand for batteries for the vehicles. The demand in some instances is exceeding the capacity of some of the largest battery companies. A123 systems has announced that it is set to expand its battery making capacity significantly. A123 makes battery packs for several automakers including Fisker and Chrysler.

A123 plans to expand the production capacity of its Livonia and Romulus battery plants beyond their original capacities. The new Livonia facility is 300,000 square feet and is set to open by the middle of 2010. A123 had the capacity to build 169 megawatt-hours of batteries as of October 2009. By the end of 2010, the battery firm will have a manufacturing capacity of 360 megawatt-hours.

Autoblog Green reports that the 360 MWh capacity is enough battery packs for 24,000 plug-in hybrids with 15 kWh batteries or 320,000 conventional hybrids with 1.1KWh battery packs. With A123 providing battery packs for Fisker, the new capacity may prove too low even with the new expanded capacity. Fisker expects to sell 15,000 of its Karma plug-in hybrids each year.

David Vieau, President and Chief Executive Officer of A123 Systems, said, "The combination of proceeds from our recent IPO and funding support from the DOE has provided A123 Systems with the capital necessary to execute against our expansion program. Our strategy is to deploy capital as we see customer demand developing, and we are encouraged by recent developments and the momentum within our overall portfolio of customer relationships across our key target markets. Examples of such activity include today's announcement of a newly established strategic relationship with Fisker Automotive, our recently signed joint venture with SAIC and expansion of our electric grid customer base just to name a few."