Back in October of 2007, Ener1 and Think Global inked what was hailed as the largest contract for lithium-ion batteries in automotive history. Under terms of that agreement, Ener1 was to deliver li-ion prototype packs to Think in March 2008 and pre-production packs in July 2008. Once those milestones were met, Ener1 expected Think to purchase $70 million in batteries between 2008-2010 and assumed that the total value of its contract with Think would exceed $200 million. By definition, expectations are just that: something expected. They are by no means automatic.
Earlier this year, Ener1 reported a widening first-quarter loss tied to a $59.4 million impairment charge due to the stalled operations of its electric vehicle partner. Faced with widening losses, Ener1 decided to write-off its entire investment in Think, essentially ending its nearly four-year-long partnership with the automaker. According to The Street, Ener1's regulatory filing reads, in part:
Ener1 held a 31-percent equity stake in Think Holdings, which it has now given back to the company. What an abrupt end. Hat tip to Matt!On May 9, 2011, we surrendered to Think Holdings, for no consideration, all shares of Think Holdings' voting equity held by Ener1...based on our determination that our investment in Think Holdings was impaired and written down to zero.
[Source: The Street]