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Ener1 Acquires Leading Korean Lithium-ion Battery Cell Producer; $34M Think Global Purchase Order

Ener1, Inc., the parent of US-based lithium-ion battery manufacturer EnerDel, is acquiring an 83% interest in Enertech International, one of South Korea’s leading lithium-ion battery cell producers.

The acquisition, which follows the recent announcement of the company’s plans to expand EnerDel’s manufacturing capacity, is intended to be immediately synergistic, and to both broaden and expand Ener1’s production capabilities. Enertech will immediately start supplying EnerDel’s new Indiana plants with cells for use in the assembly of automotive battery packs.

Enertech specializes in producing large-format prismatic cells, which Ener1 believes offer significant performance and manufacturing advantages over more common cylindrical designs. The company operates a 200,000 ft2 plant outside Seoul with an electrode production capacity sufficient to support 1,250 electric vehicle (EV) packs or 10,000 hybrid electric vehicle (HEV) packs per month.

EnerDel began using Enertech in 2007 as an outsourced supplier for 20 Ah cells for prototype and pre-production 27 kWh battery packs for Think Global. (Earlier post.)The EnerDel EV cells use LiMn2O4-spinel (LMO) cathodes and hard carbon anodes.

All the cells for Think, said Ener1 CEO Charles Gassenheimer during an conference call discussing the acquisition, are currently made at Enertech, although the packs are assembled at EnerDel’s Indiana plant. Think Global, Gassenheimer also said, has issued a firm purchase order for $34 million worth of Li-ion battery packs from EnerDel.

Ener1 is acquiring the 83% equity stake in Enertech from a Hong Kong-based private equity fund that is coming to the end of its life. The deal, worth about $55.8 million, is for 5 million shares of Ener1, Inc. common stock, 2.56 million warrants and $600,000 in cash. The warrants will have a two-year maturity and will be exercisable into shares of Ener1 stock at a strike price of $7.50. Ener1 shares closed Wednesday at $7.05.

Enertech was formerly part of the Saehan Group, which was spun out of the Samsung Group. The company holds a number of patents, including a key patent on winding technology.

The current electrode production capacity equates to about $125 million of annual revenue based on the current wholesale price of cells, Gassenheimer said. The physical plant can be expanded to up to $250 million of revenues with additional capital expenditure of about $30-40 million. Gassenheimer expects that combing the expansion of Enertech capacity with the recently announced expansion of its US plants (earlier post), EnerDel will have the capacity for about $700 million in annual revenue—$250 million from Enertech, $450 million from the US plants.

Enertech currently produces 22 million lithium-ion cells annually for the cell phone, laptop and PDA markets. Customers include LG, Samsung and Motorola.

We found a path to accelerate our business plan and more rapidly prepare for the coming shift in automotive demand. This acquisition gives us immediate scale and volume manufacturing ability, as well as an important beachhead for supplying Asian car makers that plan to use lithium-ion technology in their electric drive vehicles.

—Ener1 CEO Charles Gassenheimer

Gassenheimer said the expertise from Enertech’s engineering team will help accelerate expansion of the EnerDel Indiana plants. Ener1 believes it is the first company to produce automotive lithium-ion batteries at commercial scale in the US, and that the acquisition of Enertech will strengthen its domestic growth plans.

In August, the company announced a major expansion at its two Indiana facilities and plans to break ground on a third plant. Also in August, took full ownership of its EnerDel subsidiary by purchasing a 19.5% stake held by Delphi Automotive.


nrg nut

Enerdel based in Indiana will create 850 jobs statewide as a part of this deal. And as the parent is a member of US ABC, I expect to see additional contracts with Detroit automakers shortly.

Looks like the Think contract financed the entire deal outside the $600k in cash. Expect to see more of these M&A plays for battery makers and consolidation over the next two years prior to EV launches.

The other interesting element will be when and where the automakers start building in-house battery packs. With new chemistries arriving every 30 days or so - I would expect to start hearing about battery plants opening in every major EV manufacturers base.

EV business is booming.

Henry Gibson

The ZEBRA battery also used by Th!nk is far less complex, but there is a bias against it because it requires almost continuous connection the the grid when not operating. The energy density is as good as most LiIon cells, and it requires only simple air cooling. The power density is low but is adequate when used in a BEV for long distance. The efficiency is at least as high as LiIon even with the requirement for high temperature maintenance.

The chemical energy stored in a battery pack could be devoted to heating the pack and keep it heated for about ten days. It might take less power to keep it barely operational for longer. A kilogram of propane could keep it hot for about six days. There is no reason why a six kilogram propane tank cannot be fitted with a burner to a car with a ZEBRA battery so that it can sit for a month with no electric supply. The heating burner could alternate with a small propane powered generator if the car were in the open. The propane generator can also extend the range of the car about 120 km. ..HG..


This is good news for Enerdel. They got a huge order and now this plant. The announcement coincides with other interesting news from Exxon. Exxon Mobil is working with Enerdel on its innovative lithium battery separator film technology and they have announced they build a new separator film factory in Korea where Enerdels newly acquired factory also is located.


The Korean government has made it a priority to support the emerging industry for automotive grade lithium batteries so they get tax credits when they set up production in Korea. Wander what A123 is doing right now. Are they loosing the game to supply Think and GM?

nrg nut

The Wall Street Journal recently reported that A123 is in the running to supply batteries to Chrysler for their four PHEVs and an eREV.


It's possible that this company may also be in the running to provide Li-On battery packs for mid-model change (MMC) versions of the third-generation Toyota Prius and the new Honda Insight family hatchback that can run in true PHEV mode, making these two vehicles the world's first widely-available PHEVs from a true automobile manufacturer.


The 2010 Honda Insight announced at the Paris Auto Show is a "CONCEPT" car. As we here at GCC know, automaker "concepts" and vaporware are one and the same thing.


True, the Honda Insight shown at the Paris Auto Show is a concept, but Honda officials have admitted that the body shape for the most part is the 2010 Insight family vehicle coming spring 2009. Simplify the headlights and the instrument panel and essentially you are looking at the production vehicle.

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