Ener1 – Lithium Battery Company
After a series of setbacks, the lithium battery company Ener1 has filed for Chapter 11 bankruptcy in the US after suffering at the hands of its partner, Think, the Norwegian producer of the small electric vehicle the Think City.
What went wrong? Well, just about everything. When Think took on Ener1 as a partner, ahead of other battery makers including Tesla and A123, it turned into a parasitic relationship in which Ener1 began to try to bail out Think on the back of its poor performance.
When Think stopped production of the Think City in March last year, when it apparently ran out of money, it had only sold just over 1,000 units worldwide in nearly three years. This included launches in major car markets including the USA, the UK, Norway, France, Spain, Finland, Austria and the Netherlands.
By the time production had finished, the Think City was one of only five mass-produced, highway-certified and crash-tested all-electric vehicles on the market. But it was competing with the new Nissan Leaf, the Smart ED, the Mitsubishi I MIEV and the king of electric vehicles, the sporty Tesla Roadster.
Released earlier than almost all these vehicles, the Think City was largely inferior and at a comparably high price. In Finland, for example, its list price is just under 50,000 euros for a car that has a top speed of 68 miles per hour, does 99 miles on a full charge and generates 46 horsepower.
The US Department of Energy loans to Ener1 amount to US$55 million, and grants more than double this figure, yet Ener1’s bankruptcy this month follows two previously announced bankruptcies by Think.
So what does all this mean for the future of both companies, which have become so heavily intertwined? For Think, production is due to restart some time at the start of this year, with a refined Think City due to come off the production lines in Elkhart, Indiana. Parts will continue to be manufactured in Finland’s Uusikaupunki. But in the US alone, the company has already lost sales of up to around 2,000 units last year as production was suspended, which has delayed rebranding further.
For Ener1, this is undoubtedly the company’s lowest ebb yet, but it could still recover from bankruptcy, providing it does not continue to be weighed down by its partner. The key to the success of these companies is clearly going to be whether or not the Think City can begin to sell as an urban, electric vehicle in key markets. If so, revenue for the vehicles will come in and demand for Ener1’s batteries could soar. If not, both companies could falter.
From now on, the US Department of Energy is likely to look at Ener1 with increasing skepticism, meaning further grants and loans are unlikely. Whoever said going green would be easy?