WATERTOWN, MA - A123 Systems said it has signed an agreement with Navistar Inc. to supply lithium-ion battery systems for the Navistar-Modec EV Alliance LLC, a joint venture between Navistar and Modec Limited of the U.K. 

The supply agreement builds upon an earlier development agreement that was announced in March 2010. 

A123 will manufacture battery systems for Navistar's eStar electric delivery vehicle at its Livonia, Mich., facility. A number of vehicles have already been shipped to Federal Express as part of the earlier development agreement. The work is partially funded by the American Recovery and Reinvestment Act (ARRA) administered by the U.S. Department of Energy. 

Navistar's eStar truck is a commercial electric vehicle that is purpose-built to be electric. With zero tailpipe emissions, the Navistar electric vehicle can potentially reduce greenhouse gas emissions by as much as 10 tons annually, when compared to an equivalent diesel-powered vehicle.  

The Navistar electric vehicle has a gross vehicle weight (GVW) rating of 12,100 pounds and a payload capacity of two tons. The vehicle will be assembled in Wakarusa, Ind., and is scheduled for launch in mid-2010. 

A123's battery pack will enable the electric vehicle to travel a distance of approximately 100 miles on pure electricity before needing to be recharged. The battery pack will be capable of a rapid charge rate and will have a charge time dependent on the power of the charging system applied.