WATERTOWN, MA – Hybrid electric cars need much better batteries—and A123, a Massachusetts start-up, says it's got them.

Late 2006 A123’s new design for lithium-ion batteries hit the market in a line of power tools aimed at professional builders from the DeWalt Industrial Tool Co. The batteries operate at 36 volts, twice the voltage of their predecessors, and hold 130 watt-hours per kilogram—twice as much as standard nickel-metal-hydride cells.

Lithium-ion cells are poised to take an increasing share of the auto battery market, just as electric drive seems set to begin a long, slow climb to become, at last, a serious power-train option. But what’s rarely understood is how much that second revolution depends on the first.

The auto industry transformation began modestly enough a decade ago with the Toyota Prius, the now wildly successful gasoline-electric hybrid. And if A123 and dozens of like-minded companies and research groups can deliver on the promise of lithium-ion batteries for vehicle propulsion, in four to 10 years plug-in hybrids could be capable of going substantial distances on electricity alone.

Enthusiasm for the plug-ins being tested now, along with the 15- to 65-kilometer pure-electric range projected for their successors using lithium-ion battery packs, has raised hopes. Some analysts dare to contemplate the re-emergence of a mass-market electric car, perhaps within a decade.

Originally posted on Fleet Financials