A123 Systems

A123 Systems Signs Battery System Supply Agreement With Navistar

WATERTOWN, Mass., June 7, 2010 (GLOBE NEWSWIRE) — A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate™ lithium ion batteries and systems, today announced a production agreement with Navistar, Inc., a proven leader in worldwide commercial transportation, to supply lithium ion battery systems for electric vehicles (EVs) for the Navistar-Modec EV Alliance, LLC, a joint venture between Navistar and Modec Limited 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 (ARRA) 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 (GVW) 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.

About A123 Systems

A123 Systems, Inc. (Nasdaq:AONE) develops and manufactures advanced lithium ion batteries and battery systems for the transportation, electric grid services and consumer markets. Headquartered in Massachusetts and founded in 2001, A123 Systems‘ proprietary nanoscale electrode technology is built on initial developments from the Massachusetts Institute of Technology. For additional information please visit www.a123systems.com.

The A123 Systems, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6600

About Navistar

Navistar International Corporation (NYSE:NAV) 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. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine service parts. Another affiliate offers financing services. Additional information is available at www.Navistar.com/newsroom.

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the expected launch date of the Navistar EV and its anticipated benefits and features.   Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in customer and market demand for Navistar‘s products, delays in the development and production of the Company’s products, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which A123 and Navistar operate and other risks detailed in A123 Systems‘ annual report on Form 10-K for the year ended  December 31, 2009 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123’s expectations only as of the date of this release and should not be relied upon as reflecting A123’s views, expectations or beliefs at any date subsequent to the date of this release.

CONTACT:  Edelman
          A123 Systems PR Contact:
          Kerry Farrell

          ICR, LLC
          A123 Systems IR Contact:
          Garo Toomajanian

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