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.
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 industry.
"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." Ener1 Chairman and CEO Charles Gassenheimer said.
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 hybrid jobs, the company said.
"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 lithium-ion batteries using a flat-cell design. The company 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.
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.
AFS Trinity Power Corporation, a company that uses ultra-capacitor technology to produce after-market plug-in hybrid vehicles, said in November it would file for funding under ATVMIP.
Just before the holidays began, U.S. Lithium-ion battery maker Imara Corporation emerged from stealth operations. And an alliance of battery makers formed in the U.S. in an effort to compete more effectively against foreign companies.
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