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Summary:

Military applications for clean technology have caught our eye in the past — from mobile fuel-cell systems designed for the battlefield to the massive solar installation at Nevada’s Nellis Air Force Base. Yesterday, in a call with shareholders, energy storage company Ener1 said it, too, has […]

Military applications for clean technology have caught our eye in the past — from mobile fuel-cell systems designed for the battlefield to the massive solar installation at Nevada’s Nellis Air Force Base. Yesterday, in a call with shareholders, energy storage company Ener1 said it, too, has its sights on the possibility of selling to the U.S. Department of Defense.

Cyrus Ashtiani, CTO of subsidiary EnerDel, which makes lithium-ion batteries for hybrid, plug-in hybrid, and electric vehicles, said the military has “huge untapped potential” for lithium-ion battery technology. Hybrid vehicle technology can compete on cost in military applications, even more than in cars for the mass market, Ashtiani said, citing gasoline prices in the battlefield several hundred times higher than those seen in cities.

“The personal transportation sector, as everybody knows, is financially stressed,” said Ashtiani in yesterday’s call. Sure, alternative-fuel vehicles could take the auto industry by storm and one day dominate vehicle sales, but right now few automakers are ready to sign up for big battery supply contracts. So it’s no wonder the company is weighing other options. In addition to military contracts, the company is also looking at opportunities to deploy the battery technology it developed for Think’s electric City car to commercial fleets (buses, trucks and delivery vans, for example), and renewable energy storage for utilities and homes.

When it comes to tapping the federal government’s budget in the near-term, Ener1 is looking not to military contracts but to loan and grant programs. The company has applied for $480 million through the Department of Energy’s Advanced Technology Vehicles Manufacturing loan program to double its production capacity for hybrid vehicle battery packs, and expects to win a slice of the $2 billion allocated for battery technology in the stimulus package.

With the stimulus package, Ener1 is all but banking on a hefty grant. Ener1 Chairman and CEO Charles Gassenheimer said in yesterday’s call that based on how the Big Three automakers’ U.S. Advanced Battery Consortium and the Department of Energy divvied up funds last year, he thought it would be reasonable (and likely) for half of the $2 billion to be split among EnerDel and battery makers A123 Systems and Johnson Controls-Saft.

For the ATVM loans, Ener1 says it has progressed to the second stage — financial and technical viability — of a four-step evaluation process. (As of last month, electric sports car maker Tesla Motors was also in this stage.) The next step will involve an assessment of the actual project, and how it would further the aims of the program. If the $480 million loan comes through (in three phases), Ener1 expects to begin producing 60,000 electric vehicle battery packs per year within two to three years of beginning construction on two manufacturing facilities.

So even if all goes well for Ener1 with the loan program, a big ramp up of its production capacity remains several years away. If the funds come through, Ener1 said it expects to complete the entire project around 2015. As for 2009, the company anticipates something of a shakeout for battery makers. “You may see some big surprises here in 2009 from companies who thought they have the right answer and don’t,” Gassenheimer said, predicting that companies working with round battery cell formats will have “a very, very hard time competing at the highest levels.” It seems just a little too soon to write off competitors, however, since Ener1 could be in for its own set of surprises with those government funds.

  1. It is funny to me how arrogant that Ener1 is. They have no business plan. They have been touting their production capability and even used it to raise money, do the deal with EnerTech, and prop up their share price. Nobody wants their battery. If they do, then make and sell them, generate income, and run their business. If they don’t, restructure like GM. NO TAXPAYER MONEY FOR THESE TYPES. They are the type that got us into this mess. Their CEO was one of those hedge fund managers. They already have everything they need today and there is no reason why they need the government funds. If they need more money, raise capital. They have a stock platform

    The money should go to serious players not the propaganda players.

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  2. It is funny to me how arrogant that Ener1 is. They have no business plan. They have been touting their production capability and even used it to raise money, do the deal with EnerTech, and prop up their share price. Nobody wants their battery. If they do, then make and sell them, generate income, and run their business. If they don’t, restructure like GM. NO TAXPAYER MONEY FOR THESE TYPES. They are the type that got us into this mess. Their CEO was one of those hedge fund managers. They already have everything they need today and there is no reason why they need the government funds. If they need more money, raise capital. They have a stock platform

    The money should go to serious players not the propaganda players.
    OH! You’re my new favorite blogger fyi

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  3. In the Know, I think you may be out of the loop. If you actually read the transcript, you will note that Ener1 highly expects to be awarded new production contracts this year.

    And if you were in the Know about business, you’d know that you can’t win production contracts without production capacity. Now, what would be a great way to help finance production expansion projects? If I ran a business, I too would apply for these loans. Oh and don’t forget, Ener1 is actually domestic, with domestic facilities. Sometimes that’s a good thing to use US tax money to help finance the creation of US jobs.

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  4. In the Know apparently does not trust a publicly traded company when it says equipment is now in place and operational for 300 megawatt hours per year of capacity. This represents over 10,000 electric vehicles per year (or 100,000 hybrids, or 30,000 plug in hybrids) with the ability to expand further. The issue is one of guaranteeing this technology moves forward. In case In the Know doesn’t read much, financing has been a little expensive and difficult to come by lately.

    For anyone who is interested in the viability of the electric car today check out the article by Julian Edgar at http://autospeed.com/cms/A_111205/article.html. All the strawmen have now been run over.

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  5. Marie Wilson Friday, March 27, 2009

    Ener1 has one of its biggest investments from Russian “businessmen” with sketchy connections.. there is no way the Republican watchdogs will let that get past.

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  6. [...] spenders have closed their wallets. Energy storage company Ener1 said in a call with shareholders earlier this year that while, “The personal transportation sector, as everybody knows, is financially stressed,” [...]

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  7. [...] solid-state batteries for hybrid and plug-in vehicles as well as military applications, which energy storage companies are increasingly eying as a potential source of stable revenue in the [...]

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  8. [...] Big Three’s U.S. Advanced Battery Consortium divvied up funds last year, he thought it would be reasonable for about half of the stimulus dollars for electric drive battery manufacturing to be split among startup A123Systems, Euro-American auto [...]

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  9. [...] companies vying for funds under the ATVM program include Ener1, which in March 2009 said it had progressed to the second stage — financial and technical viability — of a four-stage evaluation [...]

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  10. It is funny to me how arrogant that Ener1 is. They have no business plan. They have been touting their production capability and even used it to raise money, do the deal with EnerTech, and prop up their share price. Nobody wants their battery. If they do, then make and sell them, generate income, and run their business. If they don’t, restructure like GM. NO TAXPAYER MONEY FOR THESE TYPES. They are the type that got us into this mess. Their CEO was one of those hedge fund managers. They already have everything they need today and there is no reason why they need the government funds. If they need more money, raise capital. They have a stock platform

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