Yesterday, Phoenix Motorcars announced that it had installed and tested its first battery pack system from Altair Nanotechnologies (NASDAQ:ALTI). According to the company's CEO, Daniel Elliott, Phoenix was very pleased with the results.

As longtime readers know, I'm no fan of Altair. Since the company installed Alan Gotcher as its CEO, however, I've been keeping an open mind, and I'll admit that this announcement makes Altair worth watching. But I continue to stand by my earlier analysis that Altair's stock already has all of the early promise of this battery technology priced into its stock.

Remember, the initial order from Phoenix was for only $750,000. Now, there is nothing wrong with a small order -- especially for a technology that has great potential. But Altair already has a market cap of $190 million, with little else in the way of meaningful revenue to justify this type of valuation.

Moving forward, I would encourage Fools to make sure a couple of milestones are met before investing. First, confirm that Phoenix makes good on its promise to deliver 500 vehicles with Altair batteries into the fleet market during 2007. Next, wait to see whether Phoenix places another, larger order with Altair to meet its next milestone of expanding production to 6,000 vehicles in 2008.

If Altair's battery performs at the level both companies say it does, both of these milestones should be easily met. Reportedly, the battery can achieve distances of up 130 miles between charges, and be recharged out of a wall socket in about six or seven hours, or with a special recharger in 10 to 15 minutes.

To this end, I would strongly encourage investors to wait for more information about this "special recharger." If Altair's batteries can recharge this quickly, it would be a very big deal -- perhaps the kind of thing that would get the larger automobile manufacturers such as Ford (NYSE:F), Honda (NYSE:HMC), and General Motors (NYSE:GM) interested in the technology.

But as they say, that's a big "but." Phoenix and Altair's mutual reluctance to disclose more information about the "special recharger" leaves me feeling suspicious.

Perhaps this is unfair; the companies could be doing so to protect proprietary intellectual property. But Altair has a dubious history of promising big nanotechnology breakthroughs but never delivering.

Therefore, until more information is forthcoming, I would encourage investors to keep an eye on Altair, but keep their powder dry. After all, as Dell (NASDAQ:DELL) and Sony (NYSE:SNE) showed this summer, batteries can be very sensitive things. I believe Altair when it says that its battery has been thoroughly tested for safety and won't explode, but I'm less sure of its stock.

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Fool contributor Jack Uldrich is the author of two books on nanotechnology, including Investing in Nanotechnology: Think Small, Win Big. He does not own stock in (or short) any of the companies mentioned in this article.Dell is both a Stock Advisor and an Inside Value pick.The Fool has a strictdisclosure policy.