A123, Watertown, Mass., is a seven-year-old company vying to break into the nascent market for lithium-ion battery packs for automobiles. A123 is in the running to supply batteries for the Chevrolet Volt, the electric car General Motors Corp. is developing.

A deal to supply Chrysler would give a boost to A123′s business ahead of a planned initial public stock offering. It registered for the offering in August.

A spokeswoman for Chrysler said the company “has nothing to announce at this time” about suppliers for its electric car. An A123 spokesman declined to comment, noting the company is in a quiet period because of its registration for an IPO.

Chrysler has been keeping its work on electric cars under tight wraps. But in recent weeks, as GM’s Volt drew heavy media attention, Chrysler management became concerned that the company was being left out of the increasing buzz about electric vehicles, people familiar with the matter said.

Source: WSJ