Ener1 Chairman's Letter to Shareholders
Dear Shareholder, We are pleased to inform you regarding the company's strides in commercializing its technologies. Our battery company EnerDel has signed a contract with the U.S. Advanced Battery Consortium (USABC). The contract validates the path we are taking to mass produce superior performing lithium ion (Li-Ion) batteries in the U.S. at a superior value. We believe our batteries will greatly improve the fuel efficiency of future hybrid vehicles, helping to reinvent the U.S. auto industry and curtail our country's dependence on foreign oil. This Phase 1 contract with the USABC is a concrete step in a proposed three phase plan that will provide revenue of scale. The USABC is a part of the United States Council for Automotive Research, an organization comprised of DaimlerChrysler, Ford and General Motors, in collaboration with the Department of Energy. EnerDel is now mid-way through phase one, and upon its successful completion, the company will pursue a Phase 2 contract with the USABC. EnerDel recently installed its first phase electrode mass production line, which can yield the equivalent of 5,000 hybrid batteries per month, at its Indiana facility. This line demonstrates our production capabilities to the USABC and is an important step forward in our launch plans to mass manufacture our Li-Ion technology for automotive applications. It also enables EnerDel to produce battery samples for potential automotive customers and begin qualifying as a North American supplier of Li-Ion hybrid vehicle batteries. Ener1's fuel cell company is delivering innovative products to the marketplace. This summer, as promised, EnerFuel introduced a series of fuel cell humidifiers for PEM fuel cell systems. Customers for this product include leading fuel cell system manufacturers, such as IdaTech, Hydrogenics and Cellex - inspiring confidence for the company's capabilities throughout the fuel cell industry. As part of a focused, staged commercialization plan, EnerFuel is developing several technologies and expects to release its next product in approximately nine months. The company's project to power an interstate rest stop in Florida with a fuel cell that runs on methanol derived from citrus waste is also progressing. The rest stop will serve as a demonstration site for our technology and educate commuters about the energy efficient benefits of fuel cells. We are working closely with state officials and will unveil the location of the rest stop shortly. Ener1 has embarked on a campaign to increase awareness for our company's progress with the investment community. The Company's historical SEC issues are resolved, its financials restated and registration statements are updated. In the past three months, we participated in the RedChip Small Cap Investor Conference, Merriman, Curhan Ford & Co.'s Next Generation Energy Conference and Equities Magazine Investment Conference. Later this month we are scheduled to present at Merriman's Investor Summit 2006 in San Francisco and Equities Magazine Transatlantic Corporate Conference at the American Stock Exchange in New York. We will post these upcoming presentations on our website (www.ener1.com). Ener1 was profiled in Equities Magazine and featured in the Indiana Business Journal. These articles can also be found on our website. I am pleased with our management team's steadfast commitment to our business plan. We are focused on our commercialization activities. Regards, Charles Gassenheimer Chairman
About Ener1, Inc.
Ener1, Inc. (OTC Bulletin Board: ENEI) is an alternative energy technology company. The company's interests include: EnerDel (www.enerdel.com), a lithium battery company in which Delphi Corp. owns a minority share; Enerstruct, a Japanese lithium battery technology company in which Ener1's strategic investor ITOCHU owns the majority share; wholly owned subsidiary EnerFuel, a fuel cell products and testing services company (www.enerfuel.com), and wholly owned subsidiary NanoEner, which develops nanotechnology-based materials and manufacturing processes for batteries and other applications (www.nanoener.com). For more information, visit http://www.ener1.com or call 954-556-4020.
Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995 conveying management's expectations as to the future based on plans, estimates and projections at the time the statements are made. The forward-looking statements contained in this press release involve risks and uncertainties, including, but not necessarily limited to: Ener1's ability to succeed as a supplier of batteries to the hybrid electric vehicle and other markets; Ener1's plans to reduce costs and gain a competitive advantage by consolidating manufacturing operations and implementing automated production processes; charges Ener1 will incur in connection with consolidating manufacturing operations; EnerFuel's ability to develop and sell products and services in its planned markets; the degree of competition in the markets for lithium battery, fuel cell and nanotechnology-based products and services, Ener1's history of operating losses, the lack of operating history for the development stage Ener1 businesses, the need for additional capital, the dependency upon key personnel and other risks detailed in Ener1's filings from time to time with the Securities and Exchange Commission. These risks and uncertainties could cause actual results or performance to differ materially from any future results or performance expressed or implied in the forward-looking statements included in this release. Ener1 undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.