Next AutoWorks didn’t receive the loan. And rightly so. Next AutoWorks made Fisker look like a good idea (both companies were backed by Kleiner Perkins, by the way). The company struggled right out of the gate with its gas-sipping, low cost, plastic car, and never went anywhere with it.

But there were another almost half dozen alternative vehicle startups that asked the DOE for loans out of the Advanced Technology Vehicle Manufacturing Program (created in 2007 and funded in 2008) but that didn’t receive loans: Bright Automotive, Aptera, Coda, Think, and Carbon Motors. And these are just companies that publicly discussed the loans with the media.

Tesla and Fisker were the only startups that received funding from the ATVM program, and half of Fisker’s loan was withheld. The close to $200 million that went to Fisker represents around 2 percent of the entire ATVM loan portfolio advocated. The bulk of the loans went to the big automakers, Nissan and Ford. The DOE became much more cautious with this program in 2011 (coinciding with Solyndra’s struggles), and has since frozen the remaining $16.6 billion of the $25 billion program.

All in all, the DOE was actually pretty cautious and conservative with the ATVM loan funding. The program definitely had problems, to be sure, including some things I outlined in this previous post: miscommunication with companies, and better early due diligence. It’s also questionable whether the government should be giving such sizable amounts to single companies, instead of putting those funds into other incentives like tax breaks.

But the ATVM program wasn’t an example of massive misspending from the DOE; it was a program that was stalled before it was really even started.

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The Chief Accounting Officer of Ener1, who is also the Chief Financial Officer of subsidiary EnerDel, Melissa Debes, also resigned on October 25, 2011. Departure of the CFO, follows the departure of Ener1′s longtime CEO and director of the Board of Directors, Charles Gassenheimer, who resigned on September 30, 2011.

One of the big problems at Ener1 was its support of electric car maker Think. Ener1 was forced to write down a $59.4 million impairment charge for its investment for the first quarter of this year, after Think headed into bankruptcy. A Russian investor ended up buying up Think’s assets, but that was the third time the company declared bankruptcy over its long history.

Then Ener1 faced some accounting weirdness. The company gave a preliminary restatement of its revenues and net income for 2010, and the first quarter of 2011, and said its net loss for 2010 was $165.32 million, which is almost a $100 million more than its previously stated net loss for 2010 of $68.80 million.

Ener1 is the parent company of EnerDel, which if you remember back to the Summer of 2009, received a $118 million grant from the Department of Energy’s $2.4 billion Electric Drive Battery and Component Manufacturing Initiative. EnerDel received the funds to help it build a factory that would produce batteries for electric vehicles. The DOE told Inside Indiana Business that EnerDel has received $55 million of the grant, and that the DOE is closely watching Ener1 and EnerDel.

On a Monday that also saw the bankruptcy of DOE loan winner Beacon Power, you can bet that House Republicans will closely be watching Ener1 and EnerDel now, too.

Our test drive of the Think City:

And our interview with Ener1 former CEO Gassenheimer:

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Ener1 delayed its second quarter financial reporting on August 9, and then said on August 16 that it needs to restate its earnings for the first quarter of 2011, and the full year 2010, because of a review of its accounting of its Think impairment. Ener1 says in the filing that:

Ener1 is currently in the process of determining whether the Company has sufficient liquidity to fund its operations.

Ener1 has done a preliminary restatement of its revenues and net income for 2010, and the first quarter of 2011, and now says its net loss for 2010 was $165.32 million, which is almost a $100 million more than its previously stated net loss for 2010 of $68.80 million. For the first quarter of 2011, Ener1 says it now has lost $20.48 million, which is actually a smaller net loss than it previously reported for the first quarter of $84.72 million. One of the problems looks like more of the impairment charge was supposed to be recorded in 2010, than in the first quarter of 2011.

We’ll see if Ener1 can continue its operations. Previously when the company announced that it was cutting its losses on Think it said it was moving more toward selling its lithium ion batteries to the power grid market. Ener1′s stock is now down 6.39 percent and trading at 43 cents.

Norwegian electric car maker Think declared bankruptcy at the end of June. About a month later, Think said that Russian investor and entrepreneur Boris Zingarevich had bought the assets of the company, as well as Think North America and Think U.K. Kleiner Perkins investor Ray Lane explained to me its investment in Think North America at the end of this interview (they don’t own anything anymore).

Here’s my video test drive of the Think City:

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Think didn’t release the price of the deal, but we’ve reached out and are waiting to hear back. Zingarevich was previously an investor in Think and also an early investor in and director at lithium-ion battery maker Ener1, which was also an investor in Think.

Earlier this year Ener1 wrote down a $59.4 million impairment charge for its Think investment and said that it would no longer fund Think. Ener1 said it pulled out of its Think investment partly because Think had stopped production and had run out of money, and also because the market for electric vehicles has been moving more slowly than expected.

In Think’s release this morning, it says both Ener1 and its other partner, Finnish auto engineering company Valmet Automotive, will work with Think on a relaunch of the Think brand and the Think City electric car, though Ener1 and Valmet are in the process of negotiating those stakes in the new company now.

The new company will be called Electric Mobility Solutions, and it will continue to sell the Think brand as well as the Think City car. The new company says it will start production on a refined version of the Think City in the first quarter of 2012.

Good luck — will the third (or fourth) time be the charm?

Here’s our test-drive of the Think City:

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Part of the reason for the oversupply of EV batteries is simple: The market for electric cars is looking like it’s going to be a lot smaller than predicted, at least in the short term. The crunched market is something battery maker Ener1, which had a deal with electric car maker Think, and Johnson Controls, which has a battery partnership with Saft, have discussed publicly. Johnson Controls is looking to end, or expand, its deal to work on EV batteries with Saft, because it wants to pursue the power grid battery market. And Ener1 cut its losses on its investment and partnership with Think, partly because the EV market was looking slower than expected. Think eventually went bankrupt.

At the same time that the EV market is looking tiny, battery makers have been expanding capacity substantially for making EV batteries and new battery makers have been moving into the EV market. But Lux says even if oil prices jump to $200 per barrel, which could cause the EV market to grow substantially by 2020, five of the leading battery makers — LG Chem, GS Yuasa, SB LiMotive, AESC, and Sanyo — would have enough capacity to manufacture far more than needed to cover that market. That means there will be dozens of battery makers with way too much supply, particularly if gas prices remain low.

In fact, Lux predicts there will be only a few winners in the EV battery market, and some of the ones already ahead include LG Chem, SB LiMotive, and Chinese makers China BAK, China Aviation Lithium Battery (CALB), and BYD. Lux also gives Envia Systems props for its innovative technology and GM backing — there will be room for small, innovative tech developers to do licensing deals and be acquired, says Lux.

On the other hand, Lux says A123 Systems and Ener1 face “an uphill climb” — marking both of them as “caution.” Lux also issued caution takes for International Battery, K2 Energy Solutions, Valence Technology, Leyden Energy, Electrovaya, and gave a “strong caution” to Altair Nanotechnologies (ouch).

There are a few ways for these battery makers to survive the coming market crunch and consolidation. One is to find new partnerships — because the market is so immature, the partnerships that are already in place are relatively tenuous. Another survival method will be to find battery markets outside of pure EVs, like hybrid vehicles, e-bikes, and the power grid.

But there will be a significant amount of losers in the market. As an anonymous president of a battery material company says in the Lux report:

“If someone wants us to build out capacity, what happens if no one use it? If we return to just phones and laptops, then my investors are looking for new management because we’re bankrupt.”

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Think has reportedly confirmed that it has filed for bankruptcy, and has also said that while Think North America was not included in the bankruptcy, the Norwegian company will determine what happens to the U.S. arm. Just six months ago, Think launched its Think City electric car in the U.S. market delivering U.S.-made cars, built at its factory in Elkhart, Indiana, to the state of Indiana for a government fleet.

A lot of twists and turns have led up to this dismal state of affairs for the twenty-year old Think. In April, the Norwegian business newspaper, Finansavisen, reported that Think was having financial trouble, had stopped production of its cars in Finland, had laid off 35 employees, and was looking for more funding.

Ener1, which previously held 48 percent of the voting power of Think, announced last month that it had written down a $59.4 million impairment charge for its Think investment and that it would know longer fund Think, partly because Think had stopped production and had run out of money. The market for electric vehicles has been moving more slowly than expected, Ener1 added.

As a result of its impairment charge for Think, Ener1 reported a net loss for the first quarter of $84.71 million, dramatically more than the $15.46 million net loss for the quarter the year earlier. Ener1 also adjusted its 2011 revenue to reflect the halted Think shipments. Ener1′s shares are trading at $1.19.

Ener1 says in its filing from Wednesday that it has a material impairment of $35.4 million from its Think investment, which could be subject to change if Ener1 can recover any money from the Think liquidation. But Ener1 is not optimistic it will recover any money: “we presently believe that any such recovery, to the extent it occurs at all, is not likely to be significant.”

Think had previously planned to start selling the Think City to U.S. consumers in mid-2011, projecting to sell between 2,000 to 3,000 cars via three to five stores. Think had planned to expand its Indiana factory in mid-2011 from 25 local workers to more than 415 by the end of 2013. Think had also been looking for a loan from the DOE’s highly competitive Advanced Technology Vehicles Manufacturing Program, and had formed a U.S. joint venture three years ago with Kleiner Perkins and RockPort Capital Partners.

Given Think Citys may never be driving U.S. roads in any real numbers, you should check out our test drive of the Think City from last year:

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Charles Gassenheimer, Ener1 chairman and CEO, said in the earnings call that last year Ener1 realized Think needed a new management team to analyze “the structural challenges, costs, usage patterns, consumer behavior and distribution for the Think and the EV industry more broadly.” After assessing the market, Ener1 came to the conclusion that electric vehicles are being deployed more slowly than expected, due to the high costs of electric cars and the slow roll-out of electric vehicle charging infrastructure.

As a result, Ener1 is stemming its losses on Think, and Gassenheimer says, “Ener1 will be guided by two principles, no additional funds will be provided to Think by Ener1, and Ener1 will try to avoid consolidating or increasing its equity exposure to Think.” In addition, Ener1 has also returned its shares to Think “in an effort to avoid any possible consolidation issues,” though it will maintain a minority equity position in a newly capitalized entity.

Gassenheimer also notes in the earnings call that Think has been unable to raise additional capital needed to restart production of its cars. The Norwegian business newspaper, Finansavisen, reported last month that Think was having financial trouble, had stopped production of its cars in Finland, had laid off 35 employees, and was looking for more funding.

As a result of its impairment charge for Think, Ener1 reported a net loss for the first quarter of $84.71 million, dramatically more than the $15.46 million net loss for the quarter the year earlier. Ener1 also adjusted its 2011 revenue to reflect the halted Think shipments. Ener1′s stock crashed on the news, dropping 20 percent and trading around $1.96.

I’ve reached out to Think to learn more and am waiting to hear back on the status of its production (of lack there of) in Finland and in Indiana.

Think had planned to start selling the Think City to U.S. consumers in mid-2011, projecting to sell between 2,000 to 3,000 cars via three to five stores in San Francisco; Southern California; New York City; Washington, D.C.; and Indianapolis. In December, Think said it had delivered its first U.S.-made Think City EVs — built at a factory in Elkhart, Ind. — to the state of Indiana for a government fleet, and Think planned to expand its Indiana factory in mid-2011 from 25 local workers to 100 people by the end of 2011 and more than 415 by the end of 2013.

Think had been looking for a loan from the DOE’s highly competitive Advanced Technology Vehicles Manufacturing Program, and Think had been expecting to hear more on the loan by the end of 2010. Think also formed a U.S. joint venture three years ago with Kleiner Perkins and RockPort Capital Partners.

The Think City is advertised to cost around $34,000 (before federal and state incentives), and about $22,000 with both federal and state subsidies. Here’s our test drive of the Think City. Maybe this is the closest it’ll come to hitting the roads in the U.S.:

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Expect Think to tackle fleets like the state of Indiana’s first, then the second car market, instead of going head-to-head over early adopter consumers with Nissan’s LEAF and GM’s Volt. In terms of a consumer launch, Think has said it plans to start selling the Think City to U.S. consumers in mid-2011, looking to sell between 2,000 to 3,000 cars via 3-5 stores in San Francisco, Southern California, New York, Washington, D.C. and Indianapolis.

The U.S.-made Think City uses a U.S.-made, lithium ion battery technology, courtesy of Ener1 and Ener1′s factory in Indiana. The Think City will cost around $34,000 (before federal and state incentives), and about $22,000 with both federal and state subsidies, in the U.S. Think says in this latest release it will expand the Indiana factory in mid-2011. The factory has just 25 local workers today, and Think states it will have 100 people by the end of 2011 and more than 415 by the end of 2013.

That sounds like Think isn’t necessarily betting on more federal support any time soon. More ambitious plans for the U.S. market have relied on approval of a loan from the DOE’s highly competitive Advanced Technology Vehicles Manufacturing Program. Think told us it expected to hear more on the loan by the end of 2010. Think, in which battery maker Ener1 holds an approximately 32 percent stake, formed a U.S. joint venture two years ago with Kleiner Perkins and RockPort Capital Partners.

Here’s our test drive of the Think City:

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A variety of auto makers are actually vying for the second car market for electric vehicles, instead of competing head-to-head with traditional car makers for an internal combustion engine replacement. Think, with its Think City urban EV, is publicly stating that it’s not trying to compete directly with the Nissan LEAF or GM’s Volt, but rather, the Think City will shoot to be an eco-friendly, gas-free, additional car. Volvo’s President of Special Vehicles, Lennart Stegland, also told me at the L.A. Auto Show that Volvo, too, is looking to offer its C30 EV as a second or third car option.

While EVs as an additional car won’t necessarily make as dramatic a dent in carbon emissions as EVs replacing traditional cars, the early market could offer a foothold into consumers’ homes, particularly because the first generation of EVs will be met with some trepidation.

Consumers are expected to take a cautious “wait and see,” approach to the first generation of EVs, according to a survey from Pike Research. In other words, look for that effect that happens when consumers wait for the second-generation of the iPod or iPhone to come out before buying one in spades for the first generation of plug-in cars. As John Gartner, analyst with Pike, put it, “It could easily take several years for mainstream car shoppers to get comfortable with the idea of electric vehicles.”

Beyond the “second car market,” EVs could find an easier sell with fleets for companies and governments. GE pledged to buy 25,000 EVs over the next few years, which would be the largest single purchase of electric vehicles to date.

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Image courtesy of Steel Master Buildings.