1:00 PM New York – The battery developer A123 Systems increased the size of the offering and price to raise $378 million. The loss making company plans to build a Michigan facility to conduct most of its research & development.

A123 Systems Inc ((AONE) priced 28.1 million shares at $13.50 each and raised $378 million. The electric vehicle battery maker increased its offering size by 2.4 million shares and priced above its initial filing range between $9 and $9.50.

The stock in the early trading surged 45% to $19.60.

The battery operator has its manufacturing in China and South Korea and was recently awarded $249 million grant to develop batteries for automotive transportation and build a plant in the U.S.

Revenues have steadily increased from $34.3 million in 2006 to $68.5 million in 2008. First quarter revenues in 2009 increased to $23.2 million from $10.3 million in the similar quarter a year ago.

The company has accumulated losses of $146 million since inception. Losses have steadily increased from $15.8 million in 2006 to $31 million in 2007 to $80.5 million in 2008.

The company’s founders have an exclusive license to commercialize technology from MIT.

The market for electric batteries is competitive and mostly dominated by Asian makers.

Sanyo, the leading supplier of batteries for cell phones and laptops is developing batteries for Honda Motor and Panasonic has a joint venture with Toyota. GS Yuasa of Japan is also developing motor cycles and automotive batteries.

A123 is working with several automakers including General Motors, Chrysler and Mercedes Benz it makes most of its revenues from its contract for batteries for buses for BAE Systems.

General Motors recently selected South Korea based LG as its battery partner for the recently launched electric powered Chevy Volt.