Ener1 Inc. (HEVV), which received a $118 million U.S. Energy Department grant to make electric-car batteries, filed for Chapter 11 bankruptcy protection today after defaulting on bond debt amid heavy competition from Asia.
The company listed assets of $73.9 million and debt of $90.5 million as of Dec. 31 in court papers filed in U.S. Bankruptcy Court in Manhattan. Ener1 has been affected by competing battery developers in China and Korea, “which generally have a lower cost manufacturing base” and lower labor and raw material costs, interim Chief Executive Officer Alex Sorokin said in the petition.
Ener1 makes lithium-ion batteries for plug-in electric cars, which had been scrutinized by federal auto-safety officials after a General Motors Co. (GM) Chevrolet Volt caught fire, people familiar with the probe said in November. A two-month federal safety investigation cleared the Volt of danger, and GM is beginning a marketing effort to tout the car as safe and innovative.
Under President Barack Obama’s economic stimulus package, the Energy Department awarded grants in an attempt to create a U.S. electric-car industry. Ener1 subsidiary EnerDel was the grant recipient and has received about $55 million of its grant so far. A spokesman for the Energy Department, Jen Stutsman, said the department would provide comment soon.
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