TechPulse 360

A123 Systems made hay Thursday morning by announcing a intimate pact with one of the nation’s most promising new age car maker, Fisker. But the move is only one tiny step in the electric battery maker’s grand ambitions.

An A123 lithium ion cell for plug in hybrids and electric vehicles

The Wall Street darling said it would supply lithium ion batteries for Fisker’s nameplate Karma plug in hybrid, expected late this year.

Karma is expected to have a 50-mile range with its battery and a 300-mile range when using its gasoline powered generator. It also is designed to go from 0 to 60 in 6 seconds, rivaling the performance of the all-electric Tesla Roadster, which already has 1,000 models on the road.

The complicated agreement also has A123 and Fisker working together to develop a battery for Fisker’s second model, the lower priced Nina, slated for 2012.

At the same time, A123 will invest $23 million in the car company, $13 million in cash and $10 in stock. Both companies are among the phalanx of anointed new generation transportation companies receiving grants and loan guarantees from the Department of Energy’s program to promote green technologies.

But behind the scenes, the Fisker deal is but a drop in the ambitious battery maker’s bucket. The company, which launched a well-received IPO last year, announced on Thursday a major expansion of its manufacturing capacity, fueled by its $249 million DOE grant.

The expansion will more than double its Michigan manufacturing capacity by the end of 2010 and give it the ability to produce batteries for more than 320,000 hybrid vehicles or 24,000 plug-in hybrids. – far more than Fisker could hope to produce in several years.

So watch for more deal like the one A123 unveiled today. The company will need the business to fill its newly enlarged plant.