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U.S. Senator Richard G. Lugar Visits Indiana Company Leading Electrification of Global Car Industry

Indiana Senator Richard G. Lugar, a key proponent of reducing foreign oil dependence for ensuring national security, today visited Indianapolis-based EnerDel, a leader in developing alternative energy systems for automotive transportation. EnerDel is a subsidiary of Ener1, Inc. (BULLETIN BOARD: ENEI) .

Senator Lugar toured EnerDel’s production facility and was briefed by management and engineers about the company’s achievement in developing innovative lithium-ion batteries for a new generation of hybrid (HEV), plug-in hybrid (PHEV), and electric vehicles (EV).

“We are deeply honored to host one of our country’s leading visionaries on the vital importance of alternative automotive energy sources,” said Ener1, Inc. Chairman Charles Gassenheimer. “Safe and affordable lithium-ion batteries are the critical link for making broad electrification of the car industry a reality now. HEVs, PHEVs and EVs, together with biofuels, will do more to cut oil consumption than any other single innovation.”

“It’s great having an innovator in the development of this critical automotive technology based in Indiana,” commented Senator Lugar. “Fostering research for advanced batteries should receive high priority as part of our nation’s effort to develop a diversity of energy sources to reduce oil dependency for security and environmental sustainability.”

During the visit, company engineers took Senator Lugar for a drive in an HEV powered by an EnerDel battery. The company became first in December last year to successfully integrate a lithium-ion battery into a mass-manufactured HEV. Hybrid electric vehicles currently use nickel-metal hydride technology (NiMH), as was formerly applied in cell phone and laptop batteries, which is less powerful, heavier, and more expensive than lithium-ion.

“Just as it did in consumer electronics, the lithium-ion battery will revolutionize the hybrid and electric car industry and will make it a reality for the mass market in the very near term,” said EnerDel CEO Ulrik Grape. “EnerDel has a unique lithium-ion chemistry and advanced battery system that provides the safest and most economical energy solution for automotive applications.”

EnerDel expects to announce initial third-party data next month from Argonne National Laboratory in Chicago on the performance of the EnerDel HEV battery. In parallel, EnerDel is developing batteries for PHEVs and EVs. The company currently is expanding production capacity to begin deliveries in late 2008 on a $70-million contract for the Th!nk City electric vehicle and is also readying for anticipated HEV volume production in 2010 and 2011.

EnerDel is a participant in U.S. Advanced Battery Consortium (USABC) programs to develop HEV and PHEV batteries. USABC is a lithium-ion battery development collaboration between the U.S. Department of Energy and the “Big Three” Detroit car makers — Chrysler LLC, Ford Motor Company and General Motors Corporation — all of which are pursuing mass production plans for electric drive vehicles. To date, EnerDel has been awarded USABC contracts including $1.0 million for Phase I HEV, $6.5 million for Phase II HEV, and $2.5 million for Phase I PHEV battery development.

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