Ener1 Signs License Agreement with ITOCHU for Li-Ion Technology

11 September 2007

Ener1, Inc. has signed a technology license agreement with ITOCHU Corporation that will grant Ener1 an exclusive world-wide license to certain "know-how" developed by EnerStruct and a certain patent and patent applications of EnerStruct and ITOCHU regarding lithium-ion battery technology.

EnerStruct, a joint venture between Ener1 and ITOCHU, has successfully completed the development of lithium-ion materials and manufacturing processes which are now in use in EnerDel’s battery operations.

Under the terms of the transaction, Ener1 will pay ¥180 million (approximately US$1.5 million) to ITOCHU through the issuance of 3,333,333 shares of Ener1, Inc common stock priced at 30 cents per share and a payment obligation in the amount of $519,885 payable in installments over ten months.

In addition, ITOCHU has signed a lock-up agreement restricting the sale of Ener1 common stock held by ITOCHU until March 31, 2008. Ener1 is forming a new subsidiary, EnerDel (Japan), Inc., to continue its Japanese operations while retaining key employees of EnerStruct.

EnerStruct has been a very successful technology development vehicle for both Ener1 and ITOCHU. It has developed materials and processes that are critical to the success of our lithium ion battery development at EnerDel.

—Charles Gassenheimer, Vice Chairman of Ener1

Ener1, Inc. is developing 1) lithium ion batteries for hybrid electric vehicles (HEV) at its 80.5% owned EnerDel subsidiary, 2) commercial fuel cell products through its EnerFuel subsidiary, and 3) nanotechnology-based materials and manufacturing processes for batteries and other applications at its NanoEner subsidiary.

EnerDel has developed its own lithium titanate (titanium oxide) anode material in collaboration with Argonne National Laboratory (ANL) for HEV applications. The company has also developed a hard carbon anode lithium-ion battery that it will target at plug-in hybrid (PHEV) and battery electric vehicle (BEV) applications. For the cathode, EnerDel uses manganese spinel (LiMn₂O₄). EnerDel uses a flat prismatic cell design.