Electric Vehicle Division News

Electric Fuel To Participate in Government-Funded Program of New All-Electric Hybrid Vehicle Consortium in Germany

— Partners in DM24 Million Program include DaimlerChrysler and Varta —

January 18, 2000 — The Electric Vehicle Division of Electric Fuel Corporation (NASDAQ: EFCX) today announced that it has agreed to participate in a cooperative all-electric hybrid vehicle development and demonstration program in Germany. The program will be implemented by a consortium comprising major German industrial firms such as DaimlerChrysler AG and Varta Batterie AG. The German Post, which sponsored an extensive field test of Electric Fuel's zinc-air battery system for electric vehicles from 1995-98, has also joined the consortium as an Advisory Partner.

During the course of the 4-year, DM 24 million program, the German firms and academic institutions will develop and demonstrate a hybrid vehicle design based on DaimlerChrysler cargo vans. The vans will be powered by Electric Fuel's refuelable zinc-air batteries as the main energy storage, together with high-power booster batteries provided by Varta, and ultracapacitors under development by Dornier GmbH (a division of DaimlerChrysler Aerospace) and by EPOC AG (formerly Siemens Matsushita Components). Consortium organizers hope that the program will eventually lead to commercialization of a high performance clean electric transportation based on these technologies.

The program's announcement was made on Friday, January 14, 2000 in Bremen, Germany, by consortium organizers BIBA - the Bremen Institute for Drive Technology and Ergonomics at the University of Bremen, after funding arrangements were put in place by the German Federal Science Ministry. According to the BIBA announcement, available on the website of Electric Fuel's EV Division (www.electric-fuel.com/EV), the Ministry selected the project, called "Electrical Power Supply for Vehicles with Long Range and High Acceleration" (abbreviated in German as EFRB), along with 5 other energy-related projects. It was selected out of 68 applicants for financing under the ministry's major scientific energy initiative called "Energy Production and Storage for Peripheral and Mobile Applications."

Electric Fuel will be paid by the project for providing battery modules and battery refueling services, according to Yoel Gilon, Electric Fuel's Director of EV Technologies. "It is gratifying to know that these important German firms and institutes have sufficient confidence in Electric Fuel's zinc-air technology to base a major consortium project on it. After the extensive investment made by Electric Fuel and the German Post and its partners during the 1990's, it is also fitting that this important step towards commercialization in Germany should be taken by German companies with generous support from the German federal government", said Gilon.

Gilon also said that Electric Fuel is particularly pleased with the technical direction taken by the consortium in combining Electric Fuel's high-energy refuelable zinc-air battery with high-power rechargeable components to create an all electric hybrid that meets all of the requirements of the modern fleet vehicle. "This is the same direction we have taken in the United States with our all-electric battery-battery hybrid transit bus project," he said. Electric Fuel has a contract with the Federal Transit Administration of the US Department of Transportation to develop and demonstrate the all-electric urban transit bus, together with General Electric and Volvo's NovaBus subsidiary. In December, the Company completed the major project milestone of delivering all of the zinc-air battery modules required for the bus, which is now undergoing drivetrain integration.

Electric Fuel Corporation (www.electric-fuel.com), with corporate offices in New York City and manufacturing and R&D facilities in Bet Shemesh, Israel, and in Auburn, Alabama, is pioneering the use of zinc-air battery technology for consumer electronic productsfocusing initially on disposable high capacity zinc air batteries for cellphones, as well as for electric vehicles and other industrial applications.

NOTE: This press release contains forward-looking statements. There are certain important factors that could cause results to differ materially from those anticipated by the statements made above as set forth in Electric Fuel's annual report on Form 10-K for the fiscal year ended December 31, 1998. Among, but not limited to these factors, are the stage of development of the Electric Fuel's products, the uncertainty of the market for disposable cellular telephone batteries, and significant future capital requirements. Furthermore, there is no assurance that the Company will be able to obtain funding required to put its automated production line into operation.