FILE - In this Feb. 23, 2007, file photo, President Bush, center, listens to Dave Vieau, President and CEO of A123 Systems, right, as he is shown a Toyota Prius plug-in hybrid car utilizing a lithium power battery during a demonstration of alternative fuel automobiles on the South Lawn of the White House. Short of cash and hurting from slow sales of electric cars, battery maker A123 Systems Inc. sent its U.S. operations into bankruptcy protection on Tuesday, Oct. 16, 2012, and quickly sold its automotive assets. The filing is likely to stoke the debate in Washington over the Obama administration?s funding of alternative energy companies. In 2009, A123 got a $249 million Department of Energy grant to help it build U.S. factories. Republicans have accused Obama of wasting stimulus money on the companies after the failure of politically connected and now-bankrupt solar power company Solyndra LLC, which left taxpayers on the hook for $528 million. (AP Photo/Charles Dharapak, File)
FILE - In this Feb. 23, 2007, file photo, President Bush, center, listens to Dave Vieau, President and CEO of A123 Systems, right, as he is shown a Toyota Prius plug-in hybrid car utilizing a lithium power battery during a demonstration of alternative fuel automobiles on the South Lawn of the White House. Short of cash and hurting from slow sales of electric cars, battery maker A123 Systems Inc. sent its U.S. operations into bankruptcy protection on Tuesday, Oct. 16, 2012, and quickly sold its automotive assets. The filing is likely to stoke the debate in Washington over the Obama administration?s funding of alternative energy companies. In 2009, A123 got a $249 million Department of Energy grant to help it build U.S. factories. Republicans have accused Obama of wasting stimulus money on the companies after the failure of politically connected and now-bankrupt solar power company Solyndra LLC, which left taxpayers on the hook for $528 million. (AP Photo/Charles Dharapak, File)
FILE- In this April 30, 2010, file photo, from right, A123 Systems, President and Chief Executive Officer David Vieau, A123 Systems electrical engineer James Fenton and A123 Systems design engineer Antonio Biundo, stand next to President Barack Obama, as he speaks in the Rose Garden of the White House in Washington. Short of cash and hurting from slow sales of electric cars, battery maker A123 Systems Inc. sent its U.S. operations into bankruptcy protection on Tuesday, Oct. 16, 2012, and quickly sold its automotive assets. The filing is likely to stoke the debate in Washington over the Obama administration?s funding of alternative energy companies. In 2009, A123 got a $249 million Department of Energy grant to help it build U.S. factories. Republicans have accused Obama of wasting stimulus money on the companies after the failure of politically connected and now-bankrupt solar power company Solyndra LLC, which left taxpayers on the hook for $528 million. (AP Photo/Haraz N. Ghanbari, File)
FILE- This Thursday, Aug. 6, 2009, file photo, shows A123 Systems Inc.'s high power Nanophospate Lithium Ion Cell for Hybrid Electric Vehicles batteries in Livonia, Mich. Short of cash and hurting from slow sales of electric cars, battery maker A123 Systems Inc. sent its U.S. operations into bankruptcy protection on Tuesday, Oct. 16, 2012, and quickly sold its automotive assets. The Chapter 11 filing in Delaware came one day after A123 warned that it likely would miss some debt payments and could be headed for court-supervised restructuring. (AP Photo/Paul Sancya, File)
DETROIT (AP) ? After years of struggling with weak sales and mounting losses, electric-car battery maker A123 Systems filed for bankruptcy protection and reached a deal to sell its automotive assets Tuesday.
Auto parts maker Johnson Controls will pay $125 million for A123's auto business, which includes two Michigan factories and the lithium-ion battery technology used in cars like the Fisker Karma and upcoming Chevrolet Spark.
A123's demise as an independent business reflects the problems of the electric-car industry. Americans have been slow to buy the vehicles because they're expensive, and many models have limited range and can run out of power on longer trips. Lackluster sales of EVs and batteries left A123 Systems Inc. with huge losses and a plunging market value.
The company's stock price, which traded for more than $20 on the day of its initial public offering in 2009, fell to 6 cents in late-day trading Tuesday.
The bankruptcy filing also spawned more Republican criticism of the Obama administration, which used stimulus money to support alternative energy businesses including A123 Inc., electric-car companies, and solar-panel maker Solyndra LLC.
Under Tuesday's deal, Johnson Controls will get A123's lithium-ion battery technology, other products and customer contacts. It will also take over A123's two Michigan factories, cathode ray factories in China and an equity interest in a Chinese battery company.
The Michigan plants, in the Detroit suburbs of Livonia and Romulus, were paid for with the help of a $249 million government grant from stimulus funds. Johnson Controls plans to keep the factories running but said it was too early to give details about A123 employees or customers.
Alex Molinaroli, president of Johnson Controls' Power Solutions division, said the A123 deal will advance JCI's battery technology.
A123 said it expects to continue operations as it moves toward the sale to Johnson Controls. The company also said it is in talks to sell its grid, commercial, government and other operations that weren't purchased by Johnson Controls.
The Waltham, Mass.-based A123 is supplying batteries for the new all-electric Chevrolet Spark subcompact from General Motors Co., as well as Fisker's Karma. Fisker has sold about 1,000 of the cars this year, while the electric Spark goes on sale in 2013. A123 also has contracts to make batteries for BMW AG.
A123 has struggled for several years, and ran into serious trouble this spring after a costly recall of its batteries.
The company warned that it might not be able to stay in business unless it got more financing, and just two months ago, it announced a $450 million lifeline from Chinese auto parts maker Wanxiang Group Corp. But A123 said Tuesday that the deal has been scrapped.
Republicans argue that grants and loans to alternative energy companies like A123 were a waste of stimulus money. They point out that Solyndra, a politically connected and now-bankrupt company, left taxpayers on the hook for $528 million after it failed to repay a government loan.
Democrats counter by saying the losses were expected when Congress created the high-risk program, which is intended to boost cutting-edge projects that would have trouble getting private financing. They say the "vast majority" of companies that received loans are still expected to pay them back in full, with interest.
Andrea Saul, spokeswoman for Republican Mitt Romney's campaign, said in an e-mail that the bankruptcy is "yet another failure for the President's disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work."
But A123's government grant was never supposed to repaid. The company had to match the money as it was used. So far it has received $132 million of the grant, Energy Department spokeswoman Jen Stutsman said.
The company also got a $6 million research grant in 2007 under the Bush administration, she said. The department said in a statement that it's common for firms to consolidate as a new industry grows and matures.
A123 subsidiaries outside the U.S. were not included in the bankruptcy filing.
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AP Auto Writer Bree J. Fowler contributed to this report from New York.
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