Ener1 and Delphi Complete Lithium Battery Transaction

Ener1 Funds Purchase of Controlling Interest Through Preferred Stock Placement

Oct 21, 2004, 01:00 ET from Ener1, Inc.

    FORT LAUDERDALE, Fla., Oct. 21 /PRNewswire-FirstCall/ -- Ener1, Inc.
 (OTC Bulletin Board:   ENEI) and Delphi Corp. (NYSE:   DPH) have completed a
 transaction to combine their lithium battery operations into a new company.
 Ener1 and Delphi expect the new company to benefit from their complementary
 technical resources, intellectual property and manufacturing assets.  The new
 company will pursue opportunities for high-energy, long-life lithium batteries
 in diverse markets including power tools, automotive, uninterrupted power
 supply, medical devices, personal mobility and military applications.
     (Logo: http://www.newscom.com/cgi-bin/prnh/20040825/FLW010LOGO )
     The new company's name, EnerDel, builds upon the venture's capability to
 deliver new solutions for stored energy and battery power.  EnerDel will
 emphasize the significant performance, size and cost advantages of lithium
 battery technologies developed by Ener1 and Delphi.  Ener1's nanotechnology-
 based vapor deposition process is expected to offer substantial cost
 advantages for EnerDel's new battery products due to greater choice of
 potential electrode materials, faster production times and elimination of
 binders and coating materials in the production of lithium batteries.
     Kevin Fitzgerald, Ener1's Chairman and CEO, said: "EnerDel will capitalize
 on the best aspects of Ener1's and Delphi's lithium battery patent portfolios,
 which provide the technology foundation for EnerDel to create innovative
 lithium battery products and market them competitively.  Our battery cell
 production skills are complemented by Delphi's design and production team,
 cell packaging, systems design and large-scale production expertise.  These
 advantages are now unified in a single company, whose performance risk we
 believe is reduced because of the combined talents and assets available to it.
 We expect great things from EnerDel."
     "EnerDel's low-cost technologies, substantial manufacturing assets and
 proven quality manufacturing and delivery systems will be significant
 marketing advantages," said Pankaj Dhingra, Delphi's energy management systems
 business line executive.
     Ener1 owns 80.5 % of EnerDel's common stock, and Delphi owns 19.5%.
 Delphi also received EnerDel 8.25% Series A Preferred Stock with a 90 day
 right to exchange some or all of the preferred for Ener1 common stock at a
 price of $1.15 per share.  Also as part of the transaction, Delphi obtained
 warrants to purchase up to 7 million shares of Ener1 common stock.  Initially,
 Delphi will have one representative on the EnerDel board of directors, which
 will have six members.
     As part of the transaction, Ener1 invested $15 million in cash into
 EnerDel for working capital.  The funds were provided through an Ener1
 financing arrangement totaling $18 million.  The structure of the financing is
 a private placement of Ener1's redeemable preferred stock, along with warrants
 to purchase shares of Ener1 common stock at $1.25 per share and $1.50 per
 share.  In connection with the initial $15 million, Ener1 issued warrants to
 purchase approximately 4.17 million shares of Ener1 common stock at $1.25 per
 share and approximately 4.17 million shares at $1.50 per share.  Once the
 financing is completed, warrants totaling 5 million shares at the $1.25
 exercise price and 5 million shares at the $1.50 exercise price will have been
 issued.  The lead investor in the financing is a Swiss company that will hold
 the shares for the benefit of an affiliate of Ener1 and Ener1 Group, Inc.,
 Ener1's majority shareholder.
     Mr. Fitzgerald also remarked on Ener1's financing: "We are very gratified
 to have been able to raise the financing for our investment in EnerDel on
 favorable terms, given today's capital markets.  The terms of the preferred
 stock financing that we used to fund this transaction are indicative of the
 continuing support and confidence of our majority shareholder.  In addition,
 we also expect that this transaction will reduce Ener1's overhead costs and
 cash requirements."
     EnerDel will be headquartered in Ft. Lauderdale, Florida, but will also
 utilize Delphi's lithium battery facilities in Indianapolis, Indiana and
 Delphi's established suppliers, in addition to Ener1's battery, nanotechnology
 and raw material processing facilities in Ft. Lauderdale.  EnerDel will have
 access to Delphi's electronics, packaging, and systems engineering expertise.
 EnerDel may also establish large scale manufacturing facilities in low-cost
 foreign locations in the future to handle high volume production.  EnerDel's
 production management team is experienced in setting up successful offshore
 production operations, having done so on several occasions for Delphi's
 manufacturing businesses.
     About Ener1, Inc.
     Ener1, Inc. (OTC Bulletin Board:   ENEI) develops and markets new
 technologies and products for clean, efficient energy sources, including high-
 energy lithium batteries and components, through EnerDel, its majority-owned
 venture with Delphi Corp.  Ener1 also develops and markets nanotechnology-
 based materials and manufacturing processes and fuel cell systems and
 components.  Ener1's technologies and products have applications for markets
 that include power tools and industrial equipment, medical devices, hybrid
 vehicle propulsion and military communications.  For more information on
 Ener1's technologies and products, visit its Web site at http://www.ener1.com
 or call (954) 556-4020.
     About Delphi
     For more information about Delphi and its operating subsidiaries, visit
 http://www.delphi.com/media .
     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 and EnerDel to
 successfully develop and market proposed lithium battery products and
 services, the degree of competition in the market for lithium battery products
 and services, Ener1's history of operating losses, the lack of operating
 history for the development stage battery business or EnerDel, the potential
 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, 2003, 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. Neither Ener1 nor EnerDel undertakes any obligation to publicly
 update or revise any forward-looking statements, whether as a result of new
 information, future events, or otherwise.
     Delphi Forward-Looking Statement
     All statements contained or incorporated in this press release which
 address operating performance, events or developments that we expect or
 anticipate may occur in the future (including statements relating to future
 sales or earnings expectations, savings expected as a result of our global
 restructurings or other initiatives, portfolio restructuring plans, volume
 growth, awarded sales contracts and earnings per share expectations or
 statements expressing general optimism about future operating results) are
 forward-looking statements within the meaning of the Private Securities
 Litigation Reform Act of 1995. These statements are made on the basis of
 management's current views and assumptions with respect to future events.
 Important factors, risks and uncertainties which may cause actual results to
 differ from those expressed in our forward-looking statements are discussed in
 detail in our filings with the Securities and Exchange Commission, including
 our annual report on Form 10-K for the year ended December 31, 2003. In
 particular, the achievement of projected levels of revenue, earnings, cash
 flow and debt levels will depend on our ability to execute our portfolio and
 other global restructuring plans in a manner which satisfactorily addresses
 any resultant antitrust or labor issues and customer concerns, any contingent
 liabilities related to divestitures or integration costs associated with
 acquisitions, and other matters; the success of our efforts to diversify our
 customer base and still maintain existing GM business; the continued
 protection and exploitation of our intellectual property to develop new
 products and enter new markets; and our ability to capture expected benefits
 of our cost reduction initiatives so as to maintain flexibility to respond to
 adverse and cyclical changes in general economic conditions and in the
 automotive industry in each market we operate, including customer cost
 reduction initiatives, potential increases in warranty costs, pension
 contributions, healthcare costs, disruptions in the labor, commodities or
 transportation markets caused by terrorism or war and other changes in the
 political and regulatory environments where we do business. Delphi does not
 intend or assume any obligation to update any of these forward-looking
      Media Contact:
      Alys Daly
      954-556-4020 or

SOURCE Ener1, Inc.