A123 Technologies held to tradition in its most recent conference call.

It lost a major customer, disappointed Wall Street, but promised a better future with smart grid.

The company stated that it is dropping out of a project to supply batteries to Fiat/Chrysler for electric cars. Last year, A123 lost out on the GM Volt contract, and longtime customer Black and Decker began to phase out incorporating A123 batteries in its power tools.

The Chrysler deal helped the company gain momentum after losing the Volt deal. A123 still has a deal to supply Fisker Automotive with batteries that it won't likely lose: it took an equity stake in Fisker as part of that deal.

"It is apparent that Asian competitors are pricing EV/PHEV batteries very aggressively to win business today, based on cost reduction curves that may or may not be achievable in the future, placing U.S. competition at a relative disadvantage," wrote Dilip Warrior of Stifel Nicholas. Well, yes. LG Chem has won both Ford and GM as customers, and Panasonic has Toyota and Tesla. (Update: Craig Irwin at Wedbush wrote a note in March that Chrysler was moving away.)

Meanwhile, A123's revenue came to $22.6 million, lower than estimates of around $25 million, and losses came to 33 cents per share, or higher than the 27 cents a share estimates.

On the bright side, A123 said it is expanding into flow batteries with 24M Technologies, a spin-out. It also expanded its deal with AES to supply grid storage.

Tags: a123 technologies, chrysler, electric cars, grid storage, lithium ion batteries