Shares of A123 Systems, a maker of lithium-ion batteries for electric cars, on Thursday jumped 40 percent in the company's Nasdaq debut.

Watertown, Massachusetts, A123 offered 28.1 million shares at $13.50 each, raising $378 million. A123 shares were under hot demand, pricing higher than a previously raised price range of $10 to $11.50.

In midday trading, A123 shares were up $5.45, or 40 percent, at $18.95.

 

Formed eight years ago, A123 is a battery startup founded by Massachusetts Institute of Technology engineers. The company attracted over $300 million from venture investors including North Bridge Venture Partners, General Electric, Qualcomm, Motorola, Procter & Gamble, Alliance Capital, Sequoia Capital, CMEA Capital, FA Technology Ventures, OnPoint, Carruth Management, and MIT.

A123 designs and manufactures rechargeable lithium-ion batteries for the transportation industry. The startup is currently developing batteries for BMW, Chrysler, GM, Delphi, and Better Place. The worldwide market for such batteries is estimated to climb to $21.8 billion by 2015 from $32 million in 2009, according to A.T. Kearney, as the number of electric vehicles in production soars.

 

A123 is unprofitable to date. The battery maker reported a net loss of $41 million on revenue of $43 million for the six months ended June 30, 2009.

In August, A123 grabbed a $249 million grant from the U.S. Department of Energy's $1.5 billion stimulus fund slated for the sector.

Goldman Sachs and Morgan Stanley were lead underwriters in the offering.

A123 trades on the Nasdaq under the ticker symbol "AONE."