Blog Post

Ener1 Seeks $480M in Government Loans

No, Ener1 (s HEV) isn’t looking for a piece of the auto bailout pie. But the hybrid and electric vehicle battery maker has applied for $480 million in loans from the U.S. Department of Energy‘s advanced vehicle incentive program.

The DOE’s $25 billion Advanced Technology Vehicles Manufacturing Loan Program was set up to help U.S. auto companies and suppliers build or retool manufacturing facilities in order to boost the mileage of new vehicles. Applications for the first round of loans were due by the end of 2008.

New York-based Ener1, which makes lithium-ion batteries through its EnerDel unit, said in a statement on Friday that if it gets the government loans, it plans to double the battery manufacturing capacity at its Indiana plant to produce 600,000 battery packs per year by 2011. The company also plans to use the cash to build a second, larger plant that could churn out batteries for up to 1.2 million vehicles by 2015.

The government cash could come in handy amid troubled times for the auto industry. Ener1, which also has operations in fuel cell development and nanomaterials, said federal assistance is necessary for the company to accelerate its production capacity to meet an expected boom in hybrid and electric vehicles in the U.S.

Last month, Ener1 announced that it secured a $30 million line of credit from its principal investor, Ener1 Group, which it said would fully fund the company through 2009. But that news came the day after Norwegian electric vehicle maker Think, an Ener1 customer, said that it was temporarily shutting down production and seeking aid from the government of Norway. At the time, Ener1 said there had been no change to Think’s $34 million battery order.

Some other U.S. battery makers are also looking for government help, forming a consortium last month to build a battery plant in the States as a way to compete against the dominant Asian battery manufacturers. The National Alliance for Advanced Transportation Battery Cell Manufacture, which includes 3M (s MMM), Johnson Controls (s JCI), and Altair Nanotechnologies, is looking for $1 billion in government funding to support the new manufacturing facility.