New York, January 27 (FinanceEnquiry.com) - Ener1 Inc (HEW.PK) filed for bankruptcy protection after a company that it owns defaulted on bond debt. The company makes electric-car batteries and had received $118 million U.S. Energy Department grant. In its Chapter 11 filing today, the company listed assets of $73.9 million and debt of $90.5 million as of Dec. 31. Ener1 has been facing severe competition from battery developers in China and South Korea who offer extremely competitive rates because of lower labor and raw material costs.

Ener1 manufactures lithium-ion batteries that are used in plug-in electric cars. Its problems escalated when a General Motors Co. Chevrolet Volt caught fire. Federal auto- safety officials scrutinized and investigated the incident and cleared the Volt of danger.

The Energy Department had awarded grants for developing a U.S. electric-car industry under President Obama’s economic stimulus package. Ener1’s EnerDel unit which was one of the grant recipients has received $55 million of its grant so far. It got a $6.5 million Energy Department advanced-battery grant and a $4 million Defense Department research and development contract under George W. Bush administration.

At least two other US government-backed renewable energy companies, Solyndra and Beacon Power have also filed for bankruptcy after they received government loan guarantees.