ENER1 INSTALLS FIRST PHASE PRODUCTION LINE

EnerDel's increases manufacturing capabilities with an eye toward becoming one of the largest Li-ion battery producers in North America for HEV/EV Applications

FORT LAUDERDALE, FL - September 12, 2006 - Ener1, Inc., (OTC: ENEI) announced today that its EnerDel battery company has installed its first mass production line for lithium ion (Li-ion) battery electrodes at the company's Indiana facility. The production line is capable of producing the electrode equivalent of 5,000 Hybrid Electric Vehicle (HEV) batteries (25KW) per month.

The investment in this new equipment is an important step forward in the Company's plan to become a leading, U.S.-based supplier of Li-Ion batteries for automotive applications. EnerDel can now demonstrate its production approach and expertise to automotive companies and OEMs, as well as begin their required qualification process to mass produce batteries for their future HEV models.

EnerDel's production line also supports the company's work with the United States Advanced Battery Consortium (USABC), a part of the U.S. Council for Automotive Research a group for collaborative research among DamilerChrysler Corp., Ford Motor Co. and General Motors Corp. The USABC is focused on securing a supply of U.S.-based Li-Ion batteries for the U.S. auto industry. In June, USABC awarded EnerDel a contract to produce a new Li-Ion battery based on advanced battery materials and low-cost production technologies. The funding validates EnerDel's path to produce a battery that is lighter, smaller and higher in power than existing HEV batteries.

EnerDel's production line includes two Hirano Tecseed Coaters, along with the required facility infrastructure. Ulrik Grape, President of EnerDel stated, "We've invested in the best production equipment for launching the manufacturing program. From a quality control standpoint, it is vital to have two coating lines to allow us to handle the coating of anodes and cathodes separately to avoid any contamination."

He added, "Our Engineering team, one of our strongest assets, is making the necessary modifications to the equipment in order to achieve stable and low cost production based on their vast experience scaling up Li-Ion battery production technology in Japan and Korea where 99% of all Li-Ion battery production is located."

EnerDel believes that securing a local, U.S.-based supply of Li-Ion batteries for hybrid vehicles is crucial to the success of automotive manufacturers producing hybrids in North America. The U.S. is the largest market for HEVs and the majority of the cars sold in the U.S. are also manufactured here.

Charles Gassenheimer Chairman of Ener1 Inc commented, "The goal here is to reduce the dependence on foreign oil. It doesn't make sense to switch our reliance on foreign oil to a dependence on a foreign supply of Li-Ion Batteries for cars and trucks."

He added, "Our strategy is to become one of the first companies to ensure a domestic supply of Li-Ion batteries. I am pleased with the progress we are making in our ability to address this challenge for the U.S. automotive industry."

About Ener1, Inc.
Ener1, Inc. (OTC Bulletin Board: ENEI) is an alternative energy technology company. The company's interests include: 80.5% of EnerDel (www.enerdel.com), a lithium battery company in which Delphi Corp. owns 19.5%; 49% of Enerstruct, a Japanese lithium battery technology company in which Ener1's strategic investor ITOCHU owns 51%; wholly owned subsidiary EnerFuel, a fuel cell products and testing services company (www.enerfuel.com), and wholly owned subsidiary NanoEner, which develops nanotechnology-based materials and manufacturing processes for batteries and other applications (www.nanoener.com). For more information, visit http://www.ener1.com or call 954-556-4020.

Safe Harbor Statement (ENER1, Inc.)
This release contains forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995 conveying management's expectations as to the future based on plans, estimates and projections at the time the statements are made. The forward-looking statements contained in this press release involve risks and uncertainties, including, but not necessarily limited to: Ener1's ability to succeed as a supplier of batteries to the hybrid electric vehicle and other markets; Ener1's plans to reduce costs and gain a competitive advantage by consolidating manufacturing operations and implementing automated production processes; charges Ener1 will incur in connection with consolidating manufacturing operations; EnerFuel's ability to develop and sell products and services in its planned markets; the degree of competition in the markets for lithium battery, fuel cell and nanotechnology-based products and services, Ener1's history of operating losses, the lack of operating history for the development stage Ener1 businesses, the need for additional capital, the dependency upon key personnel and other risks detailed in Ener1's filings from time to time with the Securities and Exchange Commission. These risks and uncertainties could cause actual results or performance to differ materially from any future results or performance expressed or implied in the forward-looking statements included in this release. Ener1 undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.