The acceleration of battery sales took a big step forward at Ener1 (Nasdaq: HEV), and a move to profitability may be next.

Sales increased 202% over last year to $33.1 million, a jump of 91.3% sequentially. Profit may not be hitting the bottom line yet, but Ener1 did have a 25.8% gross margin, so as sales grow we should eventually see that flow to the bottom line. Even a loss per share of $0.08 was two cents better than expected, and the market was impressed with the progress, which ultimately sent the stock higher.

This quarter Th!nk electric cars drove results higher, but sales have been slower than expected and a glut of inventory is expected to hang over future sales. That's not great news but with the Volvo C30 hitting preproduction and grid sales ramping up, Ener1 has demand waiting in the wing.

The company's $40 million grid storage project in Russia is set to ship in April and may be expanded to a long-term program to supply uninterruptible power supply to Federal Grid. The high cost of capital and an unreliable grid in Russia make it a hot spot for grid storage, and Ener1 is hoping other developing economies will follow close behind.

The great results for Ener1 are in contrast to equally disappointing results at A123 Systems (Nasdaq: AONE), where automotive delays have hurt results. Focusing on grid storage and its Th!nk electric vehicle production has served Ener1 well so far, and commercial vehicles should ramp up this year.

We've already seen the commercial vehicle market help Valence Technology (Nasdaq: VLNC) become the closest U.S. company to a profit at the end of 2010. All three are chasing Advanced Battery Systems (Nasdaq: ABAT) in profitability, but Ener1 is making slow and steady progress as battery sales pick up.

Right now, it looks like Ener1 has the highest potential reward for investors going forward. The combination of grid, vehicle, and small pack gives the company a diversified customer base, and sales are ramping up faster than at A123 Systems.

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