Lithium-ion battery-pack maker A123 Systems, whose customers include General Motors, Fisker and ALTe, will make battery packs for two new BMW hybrid vehicles this year. Both vehicles, the 3 Series Sedan and ActiveHybrid 5 hybrids, were unveiled at the North American International Auto Show in Detroit.

The vehicles, which BMW will start selling this year, will be equipped with A123's 32113 cylindrical batteries. The ActiveHybrid 5 hybrid will feature fuel-saving functions such as an "ECO PRO" mode which shuts off the gas engine when the car is coasting and a stop-start function when the car isn't moving.

The vehicles mark an attempt by BMW to boost its presence in the U.S. hybrid vehicle market, where it's had little success. The German automaker sold just 391 of its 750 ActiveHybrid sedans and ActiveHybrid X6 SUVs combined last year.

A123 is hoping the BMW agreement marks a turnaround of sorts for a company that's lately been beset by challenges. The company, whose batteries are also in the Via extended-range plug-in trucks that are also being unveiled this week at the Detroit Show, said late last month that batteries it made for the Fisker Karma were faulty and could cause coolant leaks. In November, A123 laid off 125 workers at two Michigan plants because of Fisker's delays in launching sales of the Karma. In November, A123 also cut its 2011 revenue forecast because of fewer-than-expected Karma orders. A123 reduced its 2011 sales forecast by $45 million to between $165 million and $180 million. The battery maker, which was founded in 2011 and went public in September 2009, has reported losses every quarter since 2008.

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