LG Chem won the Chevy Volt battery deal in 2008; its US rival went bankrupt

When General Motors approved the Chevrolet Volt, it turned the car's most critical component into an open competition: 27 applicants in 2007, narrowed to two teams — Korea's LG Chem with its Troy, Michigan subsidiary Compact Power, and the US challenger A123 Systems paired with Germany's Continental. The stakes were high because the 400-pound, 16-kWh battery pack was expected to be the Volt's most expensive element and its single most important component, the first real test of adapting consumer-electronics lithium-ion cells to automotive duty.

By 22 October 2008 — the same month the credit crisis engulfed the car industry — Reuters reported that GM had chosen LG Chem, with the automaker's own survival under scrutiny. The formal announcement slipped to 12 January 2009 at the Detroit auto show; GM-Volt, the dedicated news site, reported the delay was caused by 'the financial catastrophe.' CEO Rick Wagoner said LG's cells won on 'performance, production readiness, durability and exceptional quality' — LG Chem had a decade of mass-producing lithium-ion cells behind it, and GM's 16 months of Volt testing had run on its batteries.

The counterfactual then played out brutally. A123 Systems, founded from MIT research and hailed as the American answer to a battery sector dominated by Asian firms, received $249 million of federal funding in 2009 for Michigan plants. Its projected demand never arrived; in October 2012 it missed a $2.7 million interest payment and filed for Chapter 11 with $144 million in debt, selling its automotive assets to Johnson Controls. LG Chem's cells went into the Volt at its late-2010 launch, as GM had scheduled in January 2009.

LG Chem's cells powered the Volt from late 2010; rival A123 — winner of $249M in federal grants — missed an interest payment and filed for bankruptcy in October 2012.

LG Chem entered the bake-off with ten years of mass-produced consumer lithium-ion cells behind it; A123's chemistry was promising but its production readiness was unproven at automotive scale.

GM was selecting for its most expensive, most critical component, and chose the supplier whose durability and quality record it could verify after 16 months of testing.

The 2008 crisis compressed everyone's timelines — GM's own survival was in doubt — rewarding the supplier that needed no further capital runway to deliver.

Government money could not substitute for a market: A123's $249 million of federal grants did not save it once the projected demand for plug-in vehicles failed to arrive.

In a crisis, proven manufacturing travels: a maker with production-ready cells won the first mass-market EV program, while a venture built for the prize could not survive the wait.

The Volt reached production in late 2010, close to the schedule GM set in January 2009, powered by LG Chem cells. A123's opposite trajectory became the era's cautionary tale: it filed for bankruptcy on 16 October 2012, one of at least five government-backed clean-energy failures of that stretch alongside Ener1, Beacon Power, Abound Solar and Solyndra, and its automotive assets went to Johnson Controls. The episode showed how thoroughly the emerging EV battery industry rested on manufacturers that had mass-produced cells in Asia for years — the sector A123 had been celebrated for challenging.