In November 2005, the company announced a new, faster-recharging lithium-ion battery system[3] based on doped nanophosphate materials licensed from the Massachusetts Institute of Technology.

In December 2006, the United States Advanced Battery Consortium (USABC) in collaboration with the U.S. Department of Energy (DOE) awarded the company a US$15 million development contract to optimize A123 Systems' proprietary doped nano-phosphate battery technology for hybrid electric vehicle applications with a focus on power, abuse tolerance, durability and cost.

In January 2009, A123 systems applied to the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program (ATVMLP) for US$1.84 billion in direct loans to support the construction of new lithium-ion battery manufacturing facilities in the United States, locating the first plant in southeast Michigan near Detroit.

[15] In December 2009, the company formed a joint venture with Shanghai Automotive Industry Corporation (SAIC), the largest automaker in China.

In September 2010, the company opened the largest lithium-ion battery manufacturing facility in North America in Livonia, Michigan.

When fully operational, the factory is expected to be capable of producing battery packs for the equivalent of up to 30,000 electric cars per year.

GM, SAIC, and BMW all fell significantly below projected demand as the EV market developed much slower than anticipated.

Simultaneously the US government pulled back on loans to developing clients forcing a series of bankruptcies in the emerging marketplace.

[26] In early 2012, the company announced the replacement of defective battery packs and modules supplied to about five customers, including Fisker Automotive.

[9] In August 2012, Chinese automotive components manufacturer Wanxiang Group agreed to invest up to $465 million to acquire as much as 80% of A123 Systems;[27] but the acquisition was not completed before A123 filed for bankruptcy.

[18][29] An earlier statement, released by A123 Systems in early October, said that it had entered an asset purchase agreement with Johnson Controls, with the stipulation that the company's bid must be approved by a US bankruptcy court and could be topped by a rival bidder.

[34] In March 2018, the US battery manufacturer Lithium Werks announced it took over the Chinese factory of A123 Systems in Changzhou, plus the workforce and clients base in China, Europe and the United States.

After the merger the Texas-based company owns factories in China and offices in the US, the Netherlands, Northern Ireland, the UK and Norway.