Ft. Lauderdale, FL – June 29, 2005 - Ener1, Inc. (EBB:ENEI - www.ener1.com), an energy technology company, announced today that EnerDel, Inc., its lithium battery subsidiary, is acquiring technology and engineering services from Enerstruct, Ener1's joint venture with ITOCHU Corporation, that will enable EnerDel to implement automated mass production processes for high-rate lithium batteries. Enerstruct has agreed to provide to EnerDel a team of eight production experts with over 100 years of combined experience who have successfully implemented similar automated production systems for major lithium battery producers such as Sony, Sanyo and GS Battery.

EnerDel plans to use the automated mass production processes to manufacture a new high-rate battery cell designed by Enerstruct for use in lithium power modules. EnerDel intends to market these power modules for use in hybrid electric vehicles (HEVs) and other select markets. EnerDel believes that the HEV market will grow significantly over the next several years and that US and foreign auto manufacturers will increasingly locate plants within the US to be close to what is expected to be the major market for HEVs. EnerDel intends to benefit from this trend by producing power modules in the US that it believes can be competitively priced due to reduced manufacturing costs. EnerDel plans to target US-based HEV manufacturing and other customers seeking to avoid regulatory issues associated with importing lithium batteries from foreign manufacturers.

Management believes that the new manufacturing approach will make it possible for EnerDel to substantially reduce manufacturing labor costs and lower its cash burn rate. EnerDel has ceased manufacturing operations at its Indianapolis facility and intends to consolidate its battery production operations at its Ft. Lauderdale facility by transferring certain equipment and a small number of selected personnel to its Ft. Lauderdale manufacturing facility. EnerDel plans to leverage the system integration capabilities acquired from Delphi, its joint venture partner, during this consolidation process. EnerDel estimates these actions will result in annual savings of $5.3 million, with estimated one-time costs of approximately $2.9 million.

Kevin Fitzgerald, Chairman and Chief Executive Officer of Ener1, Inc., said, "Automating production, reducing costs and tapping into the resources made available through our joint venture with ITOCHU makes good business sense for EnerDel. The company will continue to leverage its strategic partnerships to seek competitive market advantages in the future from technology transfer arrangements such as this one."

Kenichi Watanabe, General Manager of New Business Promotion Department at ITOCHU Corporation, commented, "We have been working with Ener1 for the past two years as an investor and partner in developing and marketing new technologies through our Enerstruct joint venture. We believe that expanding the relationship between Ener1 and ITOCHU through our Enerstruct joint venture will help EnerDel capitalize on opportunities in the US hybrid vehicle segment. We know from our own experience that having the right technology is only the beginning step to success. You must be able to get the products using that technology into the market at a competitive price and cost. We understand that this is the key to EnerDel's new strategic focus, and we support EnerDel in its efforts going forward."

About Ener1, Inc.
Ener1, Inc (EBB: ENEI) is an 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 testing and component 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.

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, the ability of Ener1 to successfully develop and market proposed lithium battery, fuel cell and nanotechnology-based products and services, 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; 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 annual report on Form 10-KSB for the year ended December 31, 2004, as well as in its other 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.