I’ve been in vacation mode in recent days so haven’t been keeping up with all the news, but Ener1 (HEV) announced last week that it landed a JV deal with China’s top auto parts company, Wanxiang.  HEV will begin producing lithium battery systems for Wanxiang this year for an existing backlog of customers.  This is a great opportunity for Ener1 as it opens up the China market to them.  Traders cheered the news, sending the stock up around 30% at one point on May 28th before reversing off the highs.

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HEV CEO Charles Gassenheimer commented on the deal: “China is the fastest growing auto market in the world, currently producing 13 million vehicles per year and looking to sustain double digit growth over the next ten years.  They are already ahead of the rest of the world in embracing EV technology, particularly in the heavy-duty sector. Over the next decade, we see demand for as many as one million heavy-duty vehicles. That’s a market opportunity worth tens of billions of dollars for the lithium-ion battery industry. Working with such an established partner is an unparalleled opportunity to reach Wanxiang’s customer base, and is the first of many partnerships Ener1 expects to create now that EnerDel is in volume production.”

Ener1 recovered some of the gains it lost Friday after it was announced this morning that principal shareholder Ener1 Group, will purchase up to $65 million in equity.

All good news for a company that has seen its share price plummet this year, but technically there remains tough resistance around the $4 level which it failed at last week.  If HEV can get back above $4 and show it can hold at that new support level, it might be an interesting trade.