Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



When Does Ener1 Stop Burning Cash?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Ener1 (Nasdaq: HEV  ) has its pockets turned out again getting $20 million in equity financing yesterday. Over the last month, a cool $85 million has been handed over by investors, showing the capital markets haven't given up on lithium ion batteries yet. The question is, should you?

What concerns me most is Ener1's lack of long-term capital planning, diluting existing shareholders. It has raised $160 million in equity this year after raising over $120 million in capital since 2007. A123 Systems (Nasdaq: AONE  ) , another company waiting for electric vehicles to take off, has raised even more cash, but has planned longer term with $353 million in cash on the balance sheet at the end of last quarter, a cozy amount when compared to Ener1's $10 million.

Management is still making the argument capacity, not demand, will be the issue in coming years. Call me a skeptic, new electric vehicles have been slow to come to production in the U.S., and although the large truck and bus market may be faster to launch, they haven't slowed the cash burn. New vehicles are going to have to launch to help both companies. Below are highlighted vehicles already launched or planned to launch soon.



Anticipated Launch


Th!nk City


Volvo C30

2011 (low volume)

Japan Postal Service

2011 (1000 vehicles) 

A123 Systems



Navistar eStar

2010 (400 vehicles) 

Burning cash
As capacity is being built, the cash burn is quick for both companies. Ener1 burned through $49.8 million in the last 12 months of operations alone, and another $70.3 was spent on investing cash flow. A123 burned through $86.5 million in the last 12 months of operations, spending another $69.3 on investing cash flow. At that rate, shareholders should be concerned about more dilution before seeing positive cash flow. We know some Chinese manufacturers like Advanced Battery Technologies (Nasdaq: ABAT  ) have figured out a way to post positive earnings, but U.S. manufacturers have a long way to go.

For the sake of Ener1 and A123 Systems, the electric vehicle market better catch on quickly, or finding new sources of cash will be a big issue. One car company, Tesla Motor's (Nasdaq: TSLA  ) has grandiose plans, but a $38.5 million loss last quarter wouldn't help me sleep at night in the lithium ion battery business.

Interested in reading more about Ener1? Click here to add it to My Watchlist, and My Watchlist will find all of our Foolish analysis on this stock.

More on Batteries:

Fool contributor Travis Hoium does not own any company mentioned here. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1312418, ~/Articles/ArticleHandler.aspx, 10/26/2016 11:53:06 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,219.36 50.09 0.28%
S&P 500 2,143.17 0.01 0.00%
NASD 5,270.63 -12.77 -0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
ABAT $0.00 Down +0.00 +0.00%
Advanced Battery T… CAPS Rating: No stars
AONEQ.DL $0.00 Down +0.00 +0.00%
A123 Systems CAPS Rating: **
HEV.DL $0.00 Down +0.00 +0.00%
Ener1 Inc. CAPS Rating: *
TSLA $202.64 Up +0.30 +0.15%
Tesla Motors CAPS Rating: **