A123 had a rocky 2011, and 2012 is turning out to have its deep challenges as well.

In the face of recent genuinely positive design wins for the lithium-ion battery maker across its target markets of transportation and utility-scale storage, the firm is facing threatening self-induced as well as external issues.

On the positive side, A123 announced new automotive customers Geely, a growing Chinese automaker, and Tata Motors, India's largest automaker. The firm is developing an engine start battery for the "micro-hybrid" market.

The painful news is related to the just-announced "field campaign to replace battery modules and packs that may contain defective prismatic cells produced at A123's Livonia, Mich., manufacturing facility," according to a release.