Under the agreement, A123 will manufacture battery systems for Navistar’s eStar electric delivery vehicle at its Livonia, Michigan facility.

Navistar’s eStar truck is a commercial electric vehicle with zero tailpipe emissions and is expected to reduce greenhouse gas emissions by around 10 tons annually. The EV has a gross vehicle weight (GVW) rating of 12,100 pounds and a payload capacity of two tons. It will be assembled in Wakarusa, Indiana, and is scheduled for launch in mid-2010.

According to A123, its battery pack will enable Navistar electric vehicle to travel a distance of around 100 miles on electricity before needing to be recharged.

In addition, the battery pack will be capable of an efficient charge rate and will have a charge time dependent on power of charging system applied, the company said.