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Gassenheimer stood with the Senator for a press conference today at theIndianapolis Motor Speedway.

"Senator Bayh's plan could not come at a more critical time," commentedGassenheimer. "We think it will pay for itself many times over," Gassenheimersaid, comparing advances in the rapidly emerging sector to the birth ofAmerica's Silicon Valley computing industry. "This is a high-tech,high-growth, high-value industry, invented right here in America, and Indianais at the center of it. The priority now to build the production capacity weneed before foreign competitors beat us at our own game."

Senator Bayh discussed his proposal today at an event gathering many ofthe state's top auto-tech manufacturers at the Indianapolis Speedway. Thelegislator, who is one of the Congress's leading champions of U.S. energysecurity and alternative fuel automobiles, has offered his plan to the Senatemajority and minority leaders, co-signed by 11 other senators.

Automakers around the world have dozens of new hybrid models already inthe pipeline, but almost no current sources for batteries to power them. Therush is on in Europe, Japan, Korea and China to capture their shares of amarket that could be worth as much as $150 billion a year within a decade,some analysts say. U.S. carmakers worry that without a domestic batterysupply chain they could find themselves at the back of the line, or forced topay steep premiums.

"Viability of the American auto industry depends on the decisions and theinvestments we make today," Gassenheimer said. "The last thing we want is totrade dependence on foreign oil for dependence on foreign batteries. SenatorBayh is proposing a down payment on our long-term competitiveness andsecurity. We deeply appreciate and commend the energy and vision he isbringing to this incredibly important goal."

While costs remain a challenge for the advanced battery industry today,Gassenheimer believes full-scale production could cut current prices by half.EnerDel is currently undergoing a major expansion at its two Indianafacilities.

Sen. Bayh's proposal to provide $1.63 billion in federal grants throughthe U.S. Department of Energy is designed to ramp up production and drive downcosts of hybrid and electric drive systems. The package includes:

-- $1.0 billion in competitive grants to expand the U.S. manufacturing base for advanced batteries and other essential components. -- $295 million for R&D on new battery technology. -- $90 million in grants for state and local business and governments to build the infrastructure and other resources such as rapid-recharging stations to support plug-in and other technologies. -- $95 million in grants for near-term truck and maritime port electrification, which saves energy and dramatically cuts dangerous pollution. -- $150 million for research and development of "smart-grid" technology that can save consumers money and help integrate plug-in vehicles while improving capacity and reliability of the nation's aging electric system. By comparison, Gassenheimer points out that Japan's combined public andprivate investment in advanced battery development has outpaced that of theUnited States by as much as 10-fold for most of the past decade. Some in theindustry are already worrying about what an emerging "battery gap" might meanfor their ability to procure enough of these essential components for fuel-efficient autos.

Toyota already owns a major stake in Panasonic's battery business; Hondaand Mercedes Benz have just entered into new joint lithium-ion batteryventures.

"This is only the eye of an energy price storm," Gassenheimer said."We're getting a temporary break at the gas pump right now, but it's onlygoing to last as long as the economic downturn. Then we're right back tofacing devastating price shocks. Industry and government increasingly appearready to move forward together and that means we will prevail economically andin guaranteeing our energy security."

Safe Harbor Statement:

Certain statements made in this press release constitute forward-lookingstatements that are based on management's expectations, estimates, projectionsand assumptions. Words such as "expects," "anticipates," "plans," "believes,""scheduled," "estimates" and variations of these words and similar expressionsare intended to identify forward-looking statements. Forward-lookingstatements are made pursuant to the safe harbor provisions of the PrivateSecurities Litigation Reform Act of 1995, as amended. These statements are notguarantees of future performance and involve certain risks and uncertainties,which are difficult to predict. Therefore, actual future results and trendsmay differ materially from what is forecast in forward-looking statements dueto a variety of factors. All forward-looking statements speak only as of thedate of this press release and the company does not undertake any obligationto update or publicly release any revisions to forward-looking statements toreflect events, circumstances or changes in expectations after the date ofthis press release.

About Ener1, Inc.:

Ener1 develops and manufactures compact, high performance lithium-ionbatteries to power the next generation of hybrid and electric vehicles. Thepublicly traded company (Amex: HEV - News) is led by an experienced team ofengineers and energy system experts at its EnerDel subsidiary located inIndiana. EnerDel has developed proprietary battery systems based on technologyoriginally 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 forbattery solutions is being driven by a need to reduce dependence on oil aswell as growing concern about vehicle emissions. In addition to the automobilemarket, 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 Japanesetrading company and distributor of manufacturing equipment essential tolithium-ion battery production. ITOCHU has annual revenue of approximately $90billion and offices in more than 80 countries. Ener1 has also received fundingfrom a growing number of institutional investors.

In addition to battery technology, Ener1 develops commercial fuel cellproducts through its EnerFuel subsidiary and nanotechnology-based materialsand manufacturing processes for batteries and other applications through itsNanoEner 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.comSOURCE Ener1, Inc.