June 10, 2010 (FinancialWire) (Go to http://www.financialwire.net/?s=ftrdnwswnd for all of today’s featured news.) — A123 Systems (NASDAQ: AONE) has signed a production agreement with Navistar, Inc. (NYSE: NAV) to supply lithium ion battery systems for electric vehicles for the Navistar-Modec EV Alliance, LLC, a joint venture between Navistar and Modec Ltd. of the U.K. According to the supply agreement, which builds upon an earlier development agreement that was announced in March 2010, A123 will manufacture battery systems for Navistar's eStar electric delivery vehicle at its Livonia, Michigan facility. A number of vehicles have already been shipped to Federal Express as part of the earlier development agreement. The work is partially funded by American Recovery and Reinvestment Act funding, administered by the U.S. Department of Energy.

Rather than converting an existing, conventional fossil fuel powered truck, Navistar's eStar truck is a commercial electric vehicle that is purpose-built to be electric as it balances the needs of business and the environment. With zero tailpipe emissions, the Navistar electric vehicle can potentially reduce greenhouse gas emissions by as much as 10 tons annually, when compared to an equivalent diesel-powered vehicle. The Navistar electric vehicle has a Gross Vehicle Weight rating of 12,100 pounds and a payload capacity of two tons. The vehicle will be assembled in Wakarusa, Indiana, and is scheduled for launch in mid-2010.

A123's battery pack will enable the Navistar electric vehicle to travel a distance of approximately 100 miles on pure electricity before needing to be recharged. The battery pack will be capable of a rapid charge rate and will have a charge time dependent on the power of the charging system applied.

A123 Systems develops and manufactures advanced lithium ion batteries and battery systems for the transportation, electric grid services and consumer markets.

Navistar International is a holding company whose subsidiaries and affiliates produce International brand commercial and military trucks, MaxxForce brand diesel engines, IC Bus brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse brand chassis for motor homes and step vans.

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