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Sluggish demand for electric car forces layoffs at Ener1

March 25, 2011

Battery maker Ener1 has laid off about 3 percent of its 770 employees worldwide, partly because of lower-than-expected demand from the Think electric car being assembled in Elkhart.

About 380 of New York-based Ener1's work force was assigned to facilities in Noblesville, Indianapolis and Mount Comfort prior to the layoffs, corporate spokesman Brian Sinderson said. He was not sure to what extent the cuts affected local operations. A mix of engineers and production workers were let go, he said.

Think previously said it expected to sell 2,500 cars in the United States this year. But the company recently asked Ener1 to halt shipments of batteries while it works through an oversupply of inventory.

So far, Think has found its customer base among corporate and government fleets, including the state of Indiana. Ener1 has an ownership stake in the Norwegian company, which was its biggest customer at one point.

Sinderson said production for Think might resume in the third or fourth quarter, and some staffers could be called back.

With a $40 million contract to supply back-up for the Russian power grid, however, Ener1 is shifting resources to its energy storage division.

That shift was on display Thursday at the Mount Comfort assembly plant, where about a dozen employees used hand tools to put the finishing hardware on battery packs. Ener1 had to come up with the assembly process quickly to meet the contract demand, so it's relying on a lot of manual labor, Operations Manager Shane Weddle said.

Each battery pack holds four modules, which are about the size of a 12-pack of canned beverages. The pallet-size batteries were destined for a shipping container that ultimately would hold 1 megawatt of power.

Elsewhere in the plant, Ener1 is assembling batteries for the all-electric Volvo C-30, which will go into low-volume production in June. Volvo expects to produce 400 cars through the first quarter of 2012 with the majority going to Sweden, said Lennart Stegland, president of Volvo Cars special vehicles. That first run will include 100 cars for the U.S. market in the first quarter of next year, he said.

Stegland was on hand Thursday to help show off the silver C-30 in a test-drive event for bloggers from around the country. The electric commuter car looks much the same as Volvo's regular C-30, a sporty two-door hatchback. Its maximum speed is about 80 mph, and it can go 75 to 95 miles without recharging.

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