Low-Interest Funds Would Help Grow Domestic Production of Crucial Systems for Plug-In Vehicles, Bolster U.S. Competitiveness
NEW YORK, Jan 02, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Advanced lithium-ion battery
manufacturer Ener1, Inc. (Nasdaq: HEV) has applied for $480 million in
low-interest loans under a new federal program to spur development of the next
generation of U.S. fuel-efficient vehicles.
"We are very pleased to be able to participate in an initiative that will
help strengthen U.S. energy security, radically reduce greenhouse gases, and
sharpen the competitive edge of American producers of fuel-efficient
vehicles," said Ener1 Chairman and CEO Charles Gassenheimer. "A special
federal lending program to incentivize next-generation auto and components
manufacturers is exactly what is needed at this juncture to help regain market
share for the U.S. in this crucial industry."
EnerDel, Ener1's lithium-ion battery subsidiary, applied for the funds
under the Advanced Technology Vehicle Manufacturing Incentive Program
(ATVMIP), which is administered by the U.S. Department of Energy (DOE). The
$25 billion program is designed to enable U.S. auto companies and their
suppliers to build or retool manufacturing facilities in order to improve the
overall corporate average fuel economy (CAFE) of the American automotive
"Advanced lithium-ion battery technology is a basic need for every
automaker in the world today, and that need will grow steadily," said
Gassenheimer. "Building a strong U.S. supply chain in this rapidly emerging
industry is a top priority to maintain competitiveness vis-a-vis foreign
manufacturers that have already invested very heavily in this linchpin
EnerDel is the first and currently the only advanced lithium-ion
automotive battery manufacturer in the U.S. EnerDel's manufacturing
facilities are based in Indianapolis and Noblesville, Indiana. If granted,
the funds will enable EnerDel to double manufacturing capacity to produce
600,000 hybrid electric vehicle packs per year at its existing plant by 2011,
and to build a second larger plant capable of producing battery packs for up
to 1.2 million hybrid electric vehicles by 2015. It is anticipated that the
projects would create more than 1,300 new jobs.
Using DOE data, Ener1 estimates batteries produced at these facilities
each year could save the U.S. economy as much as $600 million at the gasoline
pump and eliminate up to one billion tons of carbon emissions annually.
The loans would be secured by project assets, and DOE is required by law
to monitor progress closely to ensure the funds are used efficiently and
effectively. If approved, the loan's interest rate, estimated to be less than
4 percent per annum, would be equal to the cost of funds to the U.S. Treasury
Department for comparable obligations over a period of 25 years or the
projected life of the project, whichever is shorter. DOE would have first
lien on all assets acquired with the funds.
"A critical new industry is taking shape before our eyes," said
Gassenheimer. "Europe and Asia have committed vast resources to build
production capacity, while the U.S. is starting to fall behind. We have the
technology, but we lack domestic production capacity. Failure to develop the
lithium-ion automotive battery industry would be tantamount to exchanging
dependence on foreign oil for dependence on foreign-made batteries."
EnerDel has developed a process for producing high-performance lithium-ion
batteries using proprietary chemistry and a flat-cell design that maximizes
power, reliability and longevity. EnerDel also specializes in software and
systems integration to customize complete battery systems for installation
into commercial vehicles.
Ener1 has successfully raised $200 million to date in the equity capital
markets, but acknowledges federal assistance is necessary for Ener1 to
accelerate its production capacity to be able to meet the U.S. auto industry's
current forecasts for hybrid and electric vehicles, and remain competitive in
a rapidly evolving global marketplace.
"Our business model suggests that for every $1 of capital investment, we
can realize $4 to $6 of annual revenue, depending on product mix,"
Gassenheimer said. "With this revenue stream, we will be able to repay the
loan on a timely basis and will help maintain the competitiveness of the
automobile manufacturing industry in the U.S."
The ATVMIP was established under Section 136 of the Energy Independence
and Security Act of 2007. Congress appropriated funds for the program in the
fall under the Continuing Resolution; those funds are separate and distinct
from the bailout loan funds approved by the White House for the Detroit 'Big
Three' automakers in December. ATVMIP loan applications for the first of
three stages of the program were due December 31. Applications under the next
stages are due at the end of the first two quarters of the current year.
Safe Harbor Statement:
Certain statements made in this press release constitute forward-looking
statements that are based on management's expectations, estimates, projections
and assumptions. Words such as "expects," "anticipates," "plans," "believes,"
"scheduled," "estimates" and variations of these words and similar expressions
are intended to identify forward-looking statements. Forward-looking
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, as amended. These statements are not
guarantees of future performance and involve certain risks and uncertainties,
which are difficult to predict. Therefore, actual future results and trends
may differ materially from what is forecast in forward-looking statements due
to a variety of factors. All forward-looking statements speak only as of the
date of this press release and the company does not undertake any obligation
to update or publicly release any revisions to forward-looking statements to
reflect events, circumstances or changes in expectations after the date of
this press release.
About Ener1, Inc.:
Ener1 develops and manufactures compact, high performance lithium-ion
batteries to power the next generation of hybrid and electric vehicles. The
publicly traded company (NASDAQ: HEV - News) is led by an experienced team of
engineers and energy system experts at its EnerDel subsidiary located in
Indiana. EnerDel has developed proprietary battery systems based on technology
originally pioneered with the assistance of the Argonne National Lab.
Ener1 is seeking to become the first company to mass-produce a
cost-competitive lithium-ion battery for hybrid and electric vehicles. Demand
for battery solutions is being driven by a need to reduce dependence on oil as
well as growing concern about vehicle emissions. In addition to the automobile
market, applications for Ener1 lithium-ion battery technology include medical,
military, aerospace, electric utility and other growing markets.
Major shareholders of Ener1 include Ener1 Group, Inc., a privately held,
global investment and advisory firm, and ITOCHU Corporation, a Japanese
trading company and distributor of manufacturing equipment essential to
lithium-ion battery production. ITOCHU has annual revenue of approximately $90
billion and offices in more than 80 countries. Ener1 has also received funding
from a growing number of institutional investors.
In addition to battery technology, Ener1 develops commercial fuel cell
products through its EnerFuel subsidiary and nanotechnology-based materials
and manufacturing processes for batteries and other applications through its
VP Corporate Communications
P: 212 920 3500
Waggener Edstrom Worldwide
P: 212 551 4815
SOURCE Ener1, Inc.