Republicans, who protested the sale to a Chinese buyer, decried A123 as a symbol of government waste and excess spending by Democrats in the 2012 presidential election. Obama distanced himself from the wreckage. Rather than see A123’s tech as a long-term strategic bet and preserving it, politicians bickered over the company and fumbled it away.
A123 serves as an elegy for America’s innovation machine. Without the means to continually develop and scale technology that doesn’t quickly show a profit, the market abandons hope early and cedes it to others. Its fate is a lesson for U.S. investors and policy makers as America tries to reverse decades of outsourcing by building a domestic EV supply chain and wean itself off dependence on China.
Some things have changed since A123’s demise. Then-president Donald Trump shook the establishment by launching a trade war with China and made manufacturing jobs central to his platform. Biden has largely kept Trump’s China policies in place and layered on massive government subsidies for EV production and consumption in the form of the Inflation Reduction Act , which is lowering the financial risk for companies.
“We have this abiding belief in the legacy industrial centres of the Western world — Detroit, Pittsburgh, Stuttgart, Turin, Tokyo, Seoul, the economic west,” he said. “If those billion-dollar balance sheets today make the principled and integrity-based decisions around acquisition partners and technology, not only can they remain at the table, they can lead.”