The saga of A123 Systems (NASDAQ: AONE) has finally come to an end -- at least for now. The stock that was once a Wall Street darling has filed for Chapter 11 bankruptcy protection and will likely leave stockholders completely wiped out as it searches for a path to the future.

The company built too much capacity too quickly, and the appetite for electric vehicles didn't live up to expectations. Continuous delays by auto partners like Fisker left the company underutilized and on a financial death spiral.

Don't say we didn't warn you that this may be coming. My predecessor Toby Shute questioned the company as far back as 2009. It took more time for me to be convinced this was a certain loser, but I finally made an underperform call earlier this year.

What's next?
The latest news is that Johnson Controls (NYSE:JCI) will buy the company's automotive assets for $125 million, including two U.S. facilities and a stake in a Chinese battery maker. The company will also provide $72.5 million in debtor-in-possession financing.

The remainder of the company's assets will be sold through the bankruptcy court.

Government investment gone bust
This is another example from the federal government's terrible track record of picking winners in emerging industries. The government gave $249 million in grants to the company. Solyndra was the most famous bankruptcy, but battery competitor Ener1 also filed for bankruptcy, and A123 Systems will be a black eye as well.

Unlike Solyndra, which was a debacle on many levels, A123 won't likely be a complete waste for the government. The company listed $459.8 million of assets and $376 million of debt. The company has some of the most advanced batteries on the market and has partnerships with big names like BMW, Smith Electric, Daimler, and Navistar, so the jobs the grant was intended to create may indeed live on. Whether or not it was a good use of funds is another debate entirely.

The way to play this
What this could do is change the future for Johnson Controls. The company is a steady operator, but it isn't known as an exciting company. Adding A123 Systems' technology and auto partners could change that. The company has the size to patiently wait for the battery market to mature, and if A123's Nanophosphate EXT technology is as good as advertised, it could be a game changer.

Tesla Motors (NASDAQ:TSLA) has proven that there's a market for electric vehicles if you make them right. Given enough time, Johnson Controls may be able to leverage some of the amazing vehicles in the pipeline and fuel competitors to Tesla's vehicles.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.