Comment on FR Doc # E8-26832

December 2, 2008 Office of the Chief Financial Officer Advanced Technology Vehicles Manufacturing Incentive Program U.S. Department of Energy 1000 Independence Avenue, S.W. Washington, DC 20585 Re: Comments on Interim Final Rule, Advanced Technology Vehicle Manufacturing Incentive Program, Docket #DOE-HQ-2008-0020-0001 To Whom This May Concern: The following is a Comment submitted by Ener1, Inc. (“Ener1”). Ener1 (AMEX: HEV) is an energy storage solutions company that is developing and commercializing advanced, high-performance safe Lithium-Ion batteries for hybrid electric, plug-in, and electric vehicles. It develops and manufactures such products through its subsidiary EnerDel in Indianapolis, Indiana, where it currently operates a Lithium-Ion battery manufacturing plant. Ener1 is the only domestically based manufacturer currently producing Lithium-Ion batteries for automotive drive purposes in the United States. Ener1 intends to apply to the grant and loan programs authorized by the Energy Independence and Security Act of 2007, as amended (“Act”). Since the Act is intended to further build domestic capability of automobile manufacturers and component suppliers, Ener1 would appear to be a targeted candidate to apply to the grant and loan programs. It appears, however, that there are some inconsistencies in the Interim Final Rule and certain provisions of the Act, which may, inadvertently, affect Ener1’s eligibility for these programs. Given the purpose of the Act, and the lack of domestic Lithium-Ion battery manufacturing capacity to supply our future hybrid and electric vehicles, it would appear that excluding companies such as Ener1 from applying to the grant and loan programs is simply an unintended consequence. In preparing its application materials for the loan program, Ener1 personnel reviewed the Interim Final Rule and relevant portions of the Act. Ener1 believes that the Interim Final Rule is either ambiguous or proposes an incorrect implementation of the Act in one respect. The source of concern is whether a “Qualifying Component,” as defined in Section 136 of the Act, is incorrectly required by the Interim Final Rule to be installed in an “Advanced Technology Vehicle” made within the United States. Section IIC of the Preamble to the Interim Final Rule (pages 16 through 29), definitions in Subpart A of the Interim Final Rule, and provisions of Subpart B of the Interim Final Rule regarding project eligibility requirements for component manufacturers, can be read to require that in order to be a “Qualifying Component,” a component must be installed in a vehicle manufactured within the United States. Ener1 finds no provision in the Act which authorizes exclusion of components manufactured in the U.S., simply because the components are installed in vehicles manufactured or sold outside the U.S. To include such exclusion in the Interim Final Rule is an improper narrowing of eligibility requirements, and runs counter to the Act. Moreover, most cars sold in the U.S. contain components manufactured outside of this country. Yet, the Interim Final Rule neither states what portion of a car must be manufactured in this country to qualify as one manufactured in the U.S., nor states how any portion will be measured (e.g., by value, weight, or function). We recommend that the Interim Final Rule be modified to clarify that vehicles assembled outside the U.S. which contain a substantial portion of U.S.-made components are eligible and that vehicles assembled in the U.S. that have a too- high content of foreign-made components are not eligible. Ener1 has entered into a contract to manufacture and supply Lithium-Ion batteries for automobile drive purposes to a company that is manufacturing vehicles in a foreign country. At lease some of these vehicles are likely to be sold in the U.S., but the proportion of the vehicles produced that will be sold in the U.S. has not yet been determined. Ener1 intends to submit an application to participate in programs authorized by the Act to equip its manufacturing plant in a manner consistent with the purposes of the Act. Ener1 requests that the Interim Final Rule be revised to remove the ambiguity which currently exists, so that companies manufacturing components within the United States for installation in vehicles manufactured in whole or in part in foreign countries are expressly eligible, and that such components manufactured are “Qualifying Components,” as defined by the Interim Final Rule. Simply put, we request express assurance that applicants manufacturing Qualifying Components within the United States for installation into vehicles manufactured, in whole or in part, outside the U.S. are not excluded from the authorized programs. To exclude manufacturers producing Qualifying Components within the United States from participating in ATVMIP programs for the sole reason that the vehicles into which such components will be installed are manufactured, in whole or in part, in a foreign country runs counter to the intent of the Act. The Act is intended to further build domestic capability of automobile manufacturers and component suppliers. Given the general lack of domestic Lithium-Ion battery manufacturing capacity, the unauthorized exclusion discussed above would likely have the unintended effect of boosting overseas battery manufacturing capabilities. We respectfully request that the above clarifications in the Interim Final Rule be made. Very truly yours, Charles Gassenheimer Chairman and Chief Executive Officer Ener1, Inc.