Electric Vehicle Division News

Electric Fuel Announces Follow-On FTA Electric Bus Contract

— $2.7 Million Cost-Share Program Will Include Road Tests
and Ultracapacitor Integration—

January 4, 2001 — Electric Fuel Corporation (Nasdaq: EFCX), announced today that the United States Federal Transit Administration has approved and agreed to fund 50% of the costs (up to a total program cost of $2.72 million) connected with Phase II of Electric Fuel's Zinc-Air Electric Transit Bus Program. Phase I of the Zinc-Air Electric Transit Bus Program was funded with the participation of the Federal Transit Administration, and the Israeli-U.S. Bi-national Industrial Research and Development Foundation (BIRD) and was successfully completed in July 2000.

The cooperative agreement provides funding for Electric Fuel, the Regional Transportation Commission of Clark County, Nevada (RTC), and GE Corporate Research & Development to continue efforts to evaluate the performance of zinc-air battery propulsion systems for transit buses.

The Phase II effort will focus on: conducting evaluations of the system and vehicle performance, including track testing and limited on-road demonstrations; enhancing the all-electric propulsion system developed in Phase I, including incorporating ultracapacitors and associated interface controls; and testing and evaluating the zinc-air battery system.

Electric Fuel will be the principal consortium partner, with overall technical and administrative responsibility for Phase II. The primary responsibilities of GE Corporate Research & Development, a partner in the Phase II effort, relate to the modification of the energy management system. RTC, also a partner in Phase II, continues its role in leading the project's peer review committee, and in arranging the demonstration drives in Clark County, Nevada.

The Zinc-Air Electric Transit Bus Program was initiated in late 1998 to demonstrate the ability of Electric Fuel's patented zinc-air fuel cell system to power a full-size, all-electric transit bus, providing a full day's range for heavy-duty city and suburban routes, under all weather conditions. At the conclusion of Phase I in July 2000, Electric Fuel announced that it had successfully completed the first actual driving tests of the bus.

The bus used in the program is a standard 40-foot (12.2 meter) transit bus manufactured by NovaBus Corporation. It has a capacity of 40 seated and 37 standing passengers and a gross vehicle weight of 39,500 lbs. (17,955 kg.). The bus utilizes a new all-electric, battery/battery hybrid propulsion system developed with funding from the Israeli-U.S. Bi-national Industrial Research and Development (BIRD) Foundation. The all-electric hybrid system consists of a main power source, an Electric Fuel zinc-air battery, and an auxiliary power source, which in Phase I consisted of an auxiliary battery. The vehicle draws cruising energy from the zinc-air battery, and draws supplementary power for acceleration, merging into traffic and hill climbing from the auxiliary power source, which in Phase II will incorporate ultracapacitors.

Transit buses require a large energy storage battery to power the vehicles while attending to passenger needs such as air-conditioning, handicapped access, etc. The test program is designed to prove that an all-electric bus can meet Municipal Transit Authority mass transit requirements, including performance, speed, acceleration and hill climbing.

Diesel engine transit buses operate in large urban areas where congestion is a fact of life and traffic is largely stop-and-go. As a result, they are a leading contributor to inner city toxic emissions, and are a major factor for those U.S. cities that have been designated as being in ``non-attainment'' with respect to air quality standards.

“Mass transit by bus is a particularly appropriate application for our zinc-air technology because of the poor emissions performance of diesel engine buses and because transit buses must operate for long shifts on a single battery charge,'' said Yehuda Harats, President and CEO of Electric Fuel. “During the course of the Phase II testing, we expect to be able to demonstrate that our zinc-air fuel cell technology can run a bus at the performance level required by the operators of metropolitan transit authorities, while contributing in a serious way to the improvement of urban air quality.''

About Electric Fuel
Electric Fuel Corporation (http://www.electric-fuel.com), with corporate and sales offices in New Jersey and London, England, and manufacturing and R&D facilities in Israel and Alabama, is a world leader in primary and refuelable Zinc-Air fuel cell technology, pioneering advancements in consumer electronics, electric vehicles, and defense and safety products. Electric Fuel's popular line of Instant Power(TM) disposable batteries for cellular telephones are based on the Company's patented, cutting-edge Zinc Air fuel cell technology. The batteries, which come fully charged and ready to use right out of the pack, provide consumers with up to five times more talk and stand-by time when compared with conventional batteries. Instant Power(TM) disposable batteries are cur rently compatible with select models of Ericsson, Motorola, Nokia and Samsung cellphones and are on sale at retail outlets throughout the United States, Europe and Israel.

All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties, including but not limited to risks relating to: product and technology development; the uncertainty of the market for Electric Fuel's products; development and growth of anticipated markets for Electric Fuel's products; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on Electric Fuel's products and markets; changing economic conditions; delay, cancellation or non-renewal of purchase orders; significant future capital requirements; and other risk factors detailed in Electric Fuel's most recent annual report on Form 10-K for the fiscal year ended December 31, 1999, and other filings with the Securities and Exchange Commission. Electric Fuel assumes no obligation to update the information in this release. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release.