AC Transit Signs Contract with EnerDel

The Alameda-Contra Costa Transit District (AC Transit) today announced the signing of a contract with EnerDel, Ener1, Inc.'s (Nasdaq: HEV) lithium-ion battery subsidiary, to produce batteries for one of the most advanced urban transit buses in the world. AC Transit has placed orders for 16 new, next-generation, hybrid-electric fuel cell buses, to replace the three older model fuel cell buses it has been operating since 2006. The new vehicles will use highly advanced battery systems developed by Indiana-based EnerDel Lithium Power Systems, the first company to produce automotive grade lithium-ion batteries on a commercial scale in the United States.

The battery system is an integral part of the zero-emission fuel cell bus, capturing energy from regenerative braking and improving fuel economy and efficiency. Twelve of the buses, which are currently in production, will be the backbone of AC Transit's fuel cell fleet and are to be used by a consortium of Bay Area transit operators in the California Air Resources Board's only Advanced Zero-Emission Bus Demonstration program. The other four buses are being purchased by UTC Power and will be operated by various transit agencies under the Federal Transit Administration's National Fuel Cell Bus Program.

"Onboard energy storage is a critical component of our hybrid-electric fuel cell buses, and finding the correct battery system to work hand-in-hand with our fuel cell system is essential to the overall success of these highly advanced vehicles," said Rick Fernandez, General Manager of AC Transit. "EnerDel offered us the best solution to address reliability and performance standards in the demanding and difficult operating environment of heavy-duty transit operations."

Since 2000, AC Transit has been developing what has become one of the most comprehensive hydrogen fuel cell demonstration programs in the world. The 16 new buses will demonstrate that lithium-ion battery systems can be scaled up for use in heavy-duty applications. In addition to EnerDel, the new buses are being designed collaboratively by AC Transit, Van Hool (the bus manufacturer and integrator), and UTC Power, a United Technologies Corp. (NYSE: UTX) company (the fuel cell system provider). Hydrogen tanks on the roof of the bus will provide a range of approximately 300 miles.

"We are honored that the design team selected EnerDel for this program, and are excited to be working with them on this project," said EnerDel CEO Ulrik Grape. "We have successfully leveraged the extensive work EnerDel has developed and delivered for other applications, while tailoring and adding additional features to this system for heavy-duty bus usage. The technologies being used in these buses will eventually find their way into all kinds of vehicles, including the one in your driveway."

Fuel cell buses are clean, ultra-quiet vehicles that only emit water vapor from the tailpipe. AC Transit began building its zero-emission bus program in 2000. The first three, full-service, fuel cell buses began operating in regular service in early 2006, and have now logged more than 165,000 miles of service, carrying in excess of 400,000 passengers. AC Transit is also the lead agency in a coalition of Bay Area transit operators working together to demonstrate the viability of zero-emission buses to the region and the transit industry. As part of this effort, AC Transit is expecting to receive delivery of its 12 next-generation fuel cell buses before June 2010.

EnerDel develops and manufactures compact, high performance lithium-ion batteries to power the next generation of hybrid and electric vehicles. It is a subsidiary of Ener1, Inc. (Nasdaq: HEV). The company is led by an experienced team of engineers and energy system experts based in Indiana. EnerDel has developed proprietary battery systems based on technology originally pioneered with the assistance of the Argonne National Lab.

In addition to battery technology, Ener1 develops commercial fuel cell products through its EnerFuel subsidiary and nanotechnology-based materials and manufacturing processes for batteries and other applications through its NanoEner subsidiary.

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