Wanxiang America, the U.S. arm of a Chinese automotive parts giant, won the bidding for a bankrupt Massachusetts lithium battery manufacturer that was once hailed as a cornerstone of President Obama’s quest for American dominance in electric vehicles and battery technology.

A123 Systems announced Sunday that Wanxiang would pay $256.6 million for all of A123’s technology, its manufacturing facilities in the United States and China, and its contracts with utilities seeking grid storage and automakers seeking batteries for electric and hybrid vehicles.

Wanxiang would not acquire A123’s Ann Arbor, Mich.-based government business, which includes all of its U.S. military contracts.

Those would be acquired for $2.25 million by Navitas Systems, a Woodridge, Ill., provider of energy storage products for commercial, industrial and government agency customers.

Wanxiang, which has 3,000 U.S. employees, beat out Johnson Controls and two foreign firms, Japan’s NEC and Germany’s Siemens.

The Chinese company is one of China’s biggest private firms with worldwide revenue of $8 billion, and it said that this is its fifth “clean energy” investment in the U.S. this year.

Johnson Controls, whose bid for automotive and government businesses was paired with NEC’s bid for grid storage and commercial business, said it dropped out of the bidding Saturday.

“Wanxiang’s offer was beyond the value of those assets to Johnson Controls,” Alex Molinaroli, president of Johnson Controls power solutions subsidiary, said in a statement Sunday.

Johnson Controls makes lithium ion batteries for automobiles.