A123 Systems (AONE) to Supply Energy Storage System to Ray Power in China

System Designed to Showcase Lithium Ion Battery Energy Storage as a Fast, Accurate and Clean Resource for Facilitating the Increased Integration of Renewable Energy Generation onto China’s Power Grid

WALTHAM, Mass., July 20, 2012 (GLOBE NEWSWIRE) — A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today announced that it will supply a 2MW grid energy storage system to Ray Power Systems Co. Ltd., a Chinese company focused on developing the frequency regulation market and relevant technologies.

“The project in China will be designed to validate the technical capabilities and benefits of energy storage as a fast-ramping, accurate and clean resource for providing frequency regulation services,” said Eldon Mou, CEO of Ray Power. “Limited overall system ramping capability has created renewable integration issues as well as potential risk of grid instability because of the high penetration of renewable generation, particularly in northern China. A123 Systems has demonstrated the viability and reliability of its product through a number of successful global commercial deployments, and we expect this project to showcase energy storage as a valuable resource for meeting China’s growing frequency regulation demand.”

“We believe that China represents a large market opportunity for our energy storage technology, including as a solution to address the ramp-management challenges associated with the increased deployment of wind and other renewable energy generation assets,” said Robert Johnson, vice president of the Energy Solutions Group at A123. “Today’s announcement builds on our progress in China and is a significant step toward proving the capability of our technology for providing frequency regulation in China. Ray Power has a deep understanding of China’s power market and of energy storage technologies and has developed a set of comprehensive solutions for deploying energy storage to capitalize on this growing opportunity, so we look forward to success in this initial deployment and believe it could lead to additional projects going forward.”

About A123 Systems

A123 Systems, Inc. (Nasdaq:AONE) is a leading developer and manufacturer of advanced lithium-ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company’s proprietary Nanophosphate® lithium iron phosphate technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information, please visit www.a123systems.com.

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

Safe Harbor Disclosure

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 deployment and the project’s commencement of operations, the progress of energy policy in China, the market conditions and opportunities in China for energy storage technology, including ancillary services, the capability of A123’s technology to provide frequency regulation in China, the expected performance of A123’s solutions and the possibility of future projects with Ray Power. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: changes or delays in Ray Power’s development and implementation of the A123’s products, delays or inability of A123’s solutions or other aspects of the energy storage project to meet their intended goals and objectives, the ability of A123’s energy storage systems to manage frequency regulation requirements of the power network, delays in customer and market demand for Ray Power’s products and services, delays in the implementation of A123’s solutions, delays in the development, production and delivery of A123’s products and solutions, revalidation and increased efficiency of A123’s manufacturing capacity, delays in A123’s manufacturing ramp, the potential for manufacturing defects, failure of A123’s cells to achieve their expected performance, capabilities, benefits, cost reductions and technical advantages, adverse economic conditions in general and adverse economic conditions specifically affecting the markets and geographies in which A123 and Ray Power operate and other risks detailed in A123 Systems’ quarterly report on Form 10-Q for the quarter ended March 31, 2012 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: A123 Systems PR Contact:
         A123 Systems
         Dan Borgasano
         617-972-3471
         dborgasano@a123systems.com

         A123 Systems IR Contact:
         ICR, LLC
         Garo Toomajanian
         617-972-3450
         ir@a123systems.com