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CORRESP
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      Ener1 Correspondence

      GIBSON,
        DUNN & CRUTCHER LLP

      LAWYERS

      A
        REGISTERED LIMITED LIABILITY PARTNERSHIP

      INCLUDING
        PROFESSIONAL CORPORATIONS

      1050
        Connecticut Avenue, N.W. Washington, D.C. 20036-5306

      (202)
        955-8500

      SIGlover@gibsondunn.com

      October
        21, 2005

                (202)
                  855-8593

                C
                  26499-00003

                (202)
                  530-9598

      Ms.
        Angela Crane

      Branch
        Chief, Division of Corporation Finance

      Securities
        and Exchange Commission

      100
        F
        Street, N.E.

      Washington,
        DC 20549

                Re:

                Ener1,
                  Inc., File No. 000-21138
Form
                  10-KSB for the Fiscal Year Ended December 31, 2004, Filed April
                  15, 2005;
                  Form 10-QSB for the Fiscal Quarters Ended March 31, 2005 and June
                  30,
                  2005

      Dear
        Ms.
        Crane:

      On
        behalf
        of Ener1, Inc. (“Ener1” or the “Company”), this responds to your letter dated
        September 21, 2005, regarding the Company’s Form 10-KSB filed on April 15, 2005
        and Form 10-QSB for the quarters ended March 31, 2005 and June 30, 2005
        (collectively, the “Filings”). Each of your comments is set forth below,
        followed by the Company’s related response. The responses were prepared by the
        Company with our assistance and the assistance of Kaufman, Rossin & Co., the
        Company’s independent registered public accounting firm from March 2002 to
        August 2005, and Eisner LLP, the Company’s current independent registered public
        accounting firm.

          -1-

      Form
        10-KSB for the Fiscal Year Ended December 31, 2004

      Management’s
        Discussion and Analysis of Financial Condition, page 14; Critical Accounting
        Policies, page 15

      Comment
        1. Tell
        us your consideration of disclosing your inter-company transaction policy
        under
        this heading.

      Response
        1

      The
        Company considered the nature and extent of inter-company transactions during
        the periods presented in the consolidated financial statements. These
        transactions primarily consisted of asset transfers and allocation of expenses
        between the Company and its subsidiaries.

      In
        accordance with Securities and Exchange Commission (“SEC”) Release No. 33-8040
“Cautionary Advice Regarding Disclosure About Critical Accounting Policies”
        (Dec. 12, 2001), registrants were encouraged to include in Management’s
        Discussion and Analysis (“MD&A”) full explanations of their critical
        accounting policies. An accounting estimate resulting from the application
        of a
        critical accounting policy is considered “critical” only if it meets two
        criteria: (1) if it requires a company to make assumptions about matters
        that
        are highly uncertain at the time the accounting estimate is made and (2)
        if
        different estimates that the company reasonably could have used for the
        accounting estimate in the current period, or changes in the accounting estimate
        that are reasonably likely to occur from period to period, would have a material
        impact on the presentation of the company’s financial condition, changes in
        financial condition or results of operations.1
        A “critical accounting policy” has been described as a policy that is both “very
        important to the portrayal of the company’s financial condition and results, and
        requires management’s most difficult, subjective or complex judgments."2 Such
        disclosure is intended to give investors insight into management’s judgments
        about future events, including the variables and assumptions underlying the
        estimates used to formulate such judgments.

      Management
        determined that accounting for the Company’s inter-company transactions did not
        involve estimates that were subject to a high degree of uncertainty or
        susceptible to changes that might materially impact the Company’s financial
        results or condition. Therefore, management concluded that the policy did
        not
        meet the criteria for disclosure as a critical accounting policy in the MD&A
        section of the Company’s Form 10-KSB.

        Financial
          Statements, page 25

        General

        Comment
          2. We
          note in your risk factors on page 19 that investors should consider,
“challenges, expenses and difficulties that (you) will face as a
development
          stage company.”
          Please tell us if you consider the company to be a development stage enterprise.
          See paragraphs 8 and 9 of SFAS 7.

        Response
          2

        Although
          the Company’s current line of business, developing new energy technologies,
          represents a shift in focus from its prior core business, the Company has
          been
          an operating entity for many years and does not consider itself to be a
          development stage enterprise within the meaning of Statement of Financial
          Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development
          Stage Companies.” The Company will not use this description in future
          filings.

          1Release
            No. 33-8098, “Proposed Rule: Disclosure in Management’s
            Discussion and Analysis
            about the Application of Critical Accounting Policies” (May 14,
            2002).

          2Speech
            by SEC Staff, “Critical Accounting and Critical Disclosures,” by Robert K.
            Herdman, Chief Accountant, Financial Executives International - San Diego
            Chapter, Annual SEC Update, January 24, 2002.

              -2-

Consolidated
              Statement of Operations, page 28

    Comment
      3. Other
      income and expense are normally non-operating expenses, comprised of items
      such
      as dividends, interest and gains on sales of assets. Revise future filings
      to
      restate interest expense as a non-operating expense, or tell us why your current
      presentation is appropriate.

    Response
      3

    The
      Company will revise future filings to report interest expense as a non-operating
      expense.

    Note
      1. Nature of Business, page 32

    Comment
      4. We
      note in September 2002 you acquired Ener1 Battery from your majority
      shareholder, Ener1 Group. Tell us how you accounted for this transaction and
      the
      accounting literature upon which you relied. Include how you value the patents
      and equipment acquired. If Ener1 Group created these assets, it appears the
      assets would have no basis to be transferred to Ener1’s balance sheet. Please
      advise.

    Response
      4

    Effective
      September 6, 2002, the Company acquired 100% of the outstanding capital stock
      of
      Ener1 Battery Company (the “Battery Company”) from Ener1 Group, Inc. (“Ener1
      Group”). Because the Company and the Battery Company were under common control,
      the Company accounted for this transaction by recording all assets and
      liabilities of the Battery Company, including patents and equipment, at the
      Battery Company’s historical cost basis as of the date of transfer. The Company
      relied upon the provisions of paragraphs D11 and D12 of appendix D to SFAS
      No.
      141, “Business Combinations” (“SFAS 141”), in determining to account for the
      transaction in this manner. Paragraph D11 states that the term business
      combination “excludes transfers of net assets or exchanges of shares between
      entities under common control.” Paragraph D12 states that “when accounting for a
      transfer of assets or exchange of shares between entities under common control,
      the entity that receives the net assets or the equity interests shall initially
      recognize the assets and liabilities transferred at their carrying amounts
      in
      the accounts of the transferring entity at the date of transfer.” The Company
      did not record the patents and equipment acquired on its books at their fair
      market value at the time of the acquisition of the Battery Company because
      SFAS
      141 does not permit the acquiring company under these circumstances to step-up
      the basis of the assets acquired to their fair market value as of the date
      of
      acquisition. In accordance with SFAS No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets” (“SFAS 144”), the Company evaluates these assets
      for possible impairment in the ordinary course of business.

    Note
      3. Significant Accounting Policies, page 33

    Principles
      of Consolidation

    Comment
      5. Please
      show us the ownership structure of Ener1 Group in greater detail. Specifically,
      how Ener1 Group relates to other companies to which you refer.

    Response
      5

    The
      organization chart attached hereto as Exhibit
      A
      illustrates the ownership structure of Ener1 Group, the Company, and the
      Company’s subsidiaries.

          -3-

    Note
      5. Property and Equipment, page 38

    Comment
      6. We
      note that machinery and equipment principally held for production and not
      currently being used is not depreciated. Please explain why depreciation was
      suspended and show us your accounting complies with GAAP.

    Response
      6

    As
      of
      December 31, 2004, the machinery and equipment, including any substantial
      portion thereof, was not ready for production, and had not yet been placed
      in
      service; therefore, the Company had not yet begun to depreciate these assets.
      See Response 15 for a further discussion of why the machinery and equipment
      had
      not yet been used. This machinery and equipment included new components for
      a
      manufacturing facility that had not been completed. Because the Company had
      not
      begun to use and depreciate the machinery and equipment, the Company’s
      depreciation of this machinery and equipment was never suspended. As stated
      in
      Accounting Research Bulletin No. 43, “Restatement and Revision of Accounting
      Research Bulletins,” Chapter 9C, paragraph 5, the cost of a productive facility
      is one of the costs of the services it renders during its useful economic life.
      Generally accepted accounting principles require that this cost be spread over
      the expected useful life of the facility in such a way as to allocate it as
      equitably as possible to the periods during which services are obtained from
      the
      use of the facility. This procedure is known as depreciation accounting, a
      system of accounting which aims to distribute the cost or other basic value
      of
      tangible capital assets, less salvage (if any), over the estimated useful life
      of the unit (which may be a group of assets) in a systematic and rational
      manner. It is a process of allocation, not of valuation. In accordance with
      depreciation accounting, the Company would not begin to depreciate the machinery
      and equipment held for production until it was ready for use, i.e.,
      the
      beginning of its useful life.

    Deferral
      of depreciation until an asset is substantially complete and ready for its
      intended use is consistent with industry practice. This practice is supported
      by
      the June 29, 2001 Exposure Draft of Proposed Statement of Position, “Accounting
      for Certain Costs and Activities Related to Property, Plant and Equipment.”
      Paragraph 34 of the Exposure Draft states “When PP&E is substantially
      complete and ready for its intended use, all expenses associated with the
      PP&E should be recognized in operations as they accrue, including carrying
      costs (such as property taxes, insurance and ground rentals), and depreciation
      should begin. PP&E should be considered substantially complete and ready for
      its intended use upon completion of all major construction and installation
      activities or when related revenues begin to be recognized, if
      sooner.”

    Note
      8. Consolidation of 49% Subsidiary (EnerLook Solutions, Inc.), page
      40

    Comment
      7. We
      note that you continued to consolidate EnerLook after your ownership fell to
      49%
      in 2003. Please discuss your basis for consolidating EnerLook despite having
      less than majority ownership. As part of your discussion explain all rights
      held
      by Ener1 Group and the management and funding by TVR.

    Response
      7

    As
      discussed in Note 8 to the Company’s financial
      statements for the year ended December 31, 2004, when
      EnerLook Solutions, Inc. (formerly known as EnerLook Health Care Solutions,
      Inc., and now known as Ener EL Holdings, Inc.) (“EnerLook”) was formed in
      February 2002, 51% of its common stock was owned by the Company. In early 2003,
      EnerLook issued 333,333 shares of common stock to Solution Investment Group,
      LLC
      in exchange for $250,000 and also issued 125,000 shares of common stock to
      an
      employee. At December 31, 2004, the Company and Ener1 Group owned 49% and 43%,
      respectively, of EnerLook’s outstanding common stock.

          -4-

    Rule
      3A-02 of Regulation S-X states that the determination of whether an entity
      should be consolidated should be made on the basis of whether the parent company
      controls the entity and does not prohibit the consolidation of a less than
      50%
      owned subsidiary. The rule specifically discusses the possibility that a company
      may need to consolidate an entity that is less-than-majority-owned if a
      parent-subsidiary relationship exists by means other than record ownership
      of
      voting stock. Rule 1-02(x) states that a subsidiary of a person is an affiliate
      controlled by such person directly, or indirectly, through one or more
      intermediaries. The term “control” as defined in Rule 1-02(g) means the
      possession of the power to direct or cause the direction of the management
      and
      policies of an entity. Control may be exercised in ways other than through
      the
      ownership of voting securities.

          The Company concluded that it controlled EnerLook, even though it
          owned
          less than a majority of EnerLook’s common stock for the following reasons: The
          combined ownership of EnerLook’s outstanding common stock by the Company and
          Ener1 Group has been approximately 92% (approximately 49% and 43%, respectively)
          since 2002. Ener1 Group also owns approximately 88% of the Company’s outstanding
          common stock. In addition, since 2002, certain members of the Company’s
          management have also been members of the management of Ener1 Group; these
          individuals also comprise a majority of the Board of Directors of EnerLook.
          For
          these reasons, the Company determined that it controlled
          EnerLook.

    In
      addition to the foregoing, the Company’s auditors consulted on an informal basis
      with an SEC staff member on this issue, and the SEC staff member concurred
      with
      the Company’s decision to consolidate EnerLook on the basis of the facts set
      forth above. Therefore, the Company determined that it was proper to consolidate
      EnerLook even