UPDATE: Bank of America Merrill Lynch Downgrades Ener1 to Underperform

Bank of America Merrill Lynch is out with its report today on Ener1 (NASDAQ: HEV), downgrading HEV to Underperform from Buy.

In its report, Bank of America Merrill Lynch writes, "We have been too optimistic on Ener1. We like the company's battery chemistries and grid storage opportunity, but the mistaken investment in Think, lack of success with passenger vehicles, and funding difficulties have caused significant stock underperformance and a challenging outlook."

Bank of America Merrill Lynch lowers its PT to $0.75 from $4.00.

Shares of HEV closed Tuesday at $0.83, up 10.79% from Monday's close.