Electric-car battery maker A123 Systems Inc. filed for bankruptcy Tuesday.
As part of the deal, the company will sell its remaining assets to fellow competitor Johnson Controls, the New York Times reported.
A123 benefitted from the stimulus program the Obama administration put in place for electric car companies.
Republicans were quick to attack the President's policies after hearing of A123's filing.
"A123 is yet another example of President Obama gambling with taxpayer dollars and picking winners and losers in the green energy world," Sen. John Thune of South Dakota told the Los Angeles Times.
Attacking President Obama's support for green energy is a clear talking point for the Republicans during this election season. Mitt Romney addressed the issue often during the first presidential debate.