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Russian Capitalist Acquires Lithium Battery Manufacturer Ener1

By Dave Brown — Exclusive to Lithium Investing News

Russian Capitalist Acquires Ener1

Russian entrepreneur Boris Zingarevich has obtained control of United States lithium battery manufacturer Ener1. The $81 million investment by the Russian businessman, who has close links with Russian President Dmitry Medvedev, has raised some concerns for US-based media outlets. 

The Obama administration has a strong track record of employing public funding to advance “green energy” and lithium battery technology research; however, in the wake of notable bankruptcies, including those of Solyndra and Ener1, criticism has been presented. The government had invested $118 million in Ener1 through federal stimulus programs, with an additional $80 million in local and state initiatives. The company had recruited top US scientists at the Argonne National Laboratory in Illinois to develop and produce leading-edge battery technology for electric cars and defense purposes.

Most recent initiatives

The Advanced Research Projects Agency - Energy (ARPA-E) has allocated $43 million for two new programs aimed at developing energy storage technologies that will promote efficient and secure energy supplies.

One program will fund research of advanced function and control technologies to improve the performance, safety, and duration of energy storage systems. It is intended to pioneer a new generation of electric and hybrid-electric vehicles, and improve the practicality of the domestic electricity grid.

The second program recognizes the role that small businesses play in developing energy storage technologies, and is soliciting small business applicants to develop stationary and transportation energy storage technologies. This initiative, which includes research to advance low-cost, grid-scale storage, particularly for utility companies, involves implications for lithium investors. Three additional research areas for vehicle energy storage include battery designs, chemistries, and architectures.

Increased commitment

A recommitment was evident in President Obama's $3 trillion budget request for this October. President Obama requested a five percent increase in federal spending on non-defense research and development that, while relatively small, is noteworthy because it comes at a time of intense political scrutiny and economic pressure. The proposed research expense confirms the government's priority for lithium battery technologies.

The Vehicle Technologies Program stands to benefit from the proposed budget as it would receive a 27.7 percent increase in funding to $420 million. Support for advanced battery and electric drive technology would increase by 73 percent as part of Obama's continued focus on vehicle electrification. The budget highlights plans to support cooperative research and development with the automotive industry on electrochemical energy storage, power electronics, electric motors, electric traction drive, advanced combustion engines, and lightweight and propulsion materials.

Although the Solyndra case and strong resistance in Congress pose risks for loan guarantee programs and the overall budget proposal, bipartisan and industrial interest should offer support for the Vehicle Technologies Program. This may interest may insulate the program from major cuts and could be a tailwind for the overall lithium industry.

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