EnerDel Announces Acceleration to Phase Two of Defense Department R&D Contract

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Under the new agreement, Ener1's lithium-ion battery subsidiary EnerDel has been awarded $1.46 million to develop a complimentary anode for the UAV battery pack to increase the cruising time of the vehicle. The phase two award comes in addition to a $4 million contract in September, 2008, to produce lightweight, high-performance battery solutions for real-time tracking of military assets in harsh climates and phase one of the UAV program.

"The DoD is one of the most demanding customers there is. Our collaboration is pushing the capabilities of EnerDel's battery cell technology," said EnerDel CEO Ulrik Grape. "We believe the market opportunities for developing advanced battery technologies for the military are substantial and will create research and development synergies with our core business of supplying complete systems solutions for the automotive industry."

With the successful completion of phase two, EnerDel expects to increase the theoretical cruising time for the UAV from fifty three to eighty one minutes. The timeline for the project completion is eighteen months.

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 (Amex: 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 NanoEner subsidiary.

    Contacts:  INVESTOR RELATIONS              MEDIA RELATIONS
               Rachel Carroll                  Jon Coifman
               VP Corporate Communications     Waggener Edstrom Worldwide
               P: 212 920 3500                 P: 212 551 4815
               E: rcarroll@ener1.com           E: jcoifman@waggeneredstrom.com

SOURCE Ener1, Inc.

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