Electric Vehicle Division News

Electric Fuel Granted New FTA Funding for the Electric Transit Bus Program

October 23, 2002 — Electric Fuel Corporation (NasdaqNM: EFCX), received approval from the United States Federal Transit Administration (FTA) to fund at least half of the $2 million budget associated with the new Phase III of Electric Fuel’s Zinc-Air Electric Transit Bus Program, with remainder of the budget shared by the partners in the program. Electric Fuel’s Program partner is General Electric Global Research. The Regional Transportation Commission of Southern Nevada (RTC) will continue its role in leading the project’s peer review committee, and supporting demonstration drives in Southern Nevada.

The new Phase III effort will include an evaluation of the performance of zinc-air battery propulsion systems for transit buses, the installation of new advanced ultra capacitors and the implementation of an advanced control system for auxiliaries.

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. During 2001 and 2002, Electric Fuel announced that various performance tests and on road bus demonstrations had been successfully completed.

Diesel engine transit buses operate in large urban areas where congestion is a commonplace 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. Overall, transit buses require a large energy storage battery to power the vehicle while attending to passenger needs such as air-conditioning, handicapped access and similar ancillary functions.

The Zinc Air test program is designed to prove that an all-electric bus can meet transit bus standards, including New York Municipal Transit Authority mass transit requirements, which include performance, speed, acceleration, and hill climbing.

Robert S. Ehrlich, Chairman, President and CEO of Electric Fuel, commented, “The continued support from the FTA is great encouragement for our zero-emission bus program. 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 the requirement of transit buses to operate for long shifts on a single battery charge. During the course of this new testing program, we expect to be able to further 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 the Zinc-Air Bus

The bus used in the program is a standard 40-foot (12 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 jointly developed by Electric Fuel and General Electric Global Research with funding from the Federal Transit Administration of the Department of Transportation. Phase I of the program included funding also from the Israeli-U.S BIRD Foundation. The all-electric hybrid system consists of a main energy source; an Electric Fuel zinc-air battery; and an auxiliary power source, which in Phase II, consisted of an auxiliary battery. The vehicle draws cruising energy from the zinc-air battery and supplementary power for acceleration, merging into traffic and hill climbing from the auxiliary power source, which in Phase III, will incorporate advanced generation ultracapacitors.

About Electric Fuel

Electric Fuel Corporation (http://www.electric-fuel.com) is a world leader in primary and refuelable zinc-air fuel cell technology, pioneering advancements in battery technology for defense and security products and other military applications and electric vehicles. Electric Fuel also develops, manufactures and markets advanced high-tech multimedia and interactive digital solutions for training of military, law enforcement and security personnel, as well as using state of the art lightweight materials and advanced engineering processes to armor vehicles.

Electric Fuel has corporate and sales offices in New York and London and conducts its research, development and production activities through subsidiaries in Israel and Colorado, and at its production facility in Auburn, Alabama, where it builds and tests advanced batteries for the defense market.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties that may cause actual results to vary significantly. These risks and uncertainties include, but are not limited to, risks relating to: product and technology development; the uncertainty of the market for Electric Fuel’s products; changing economic conditions; delay, cancellation or non-renewal of purchase orders; significant future capital requirements; the Company’s ability to quickly and smoothly execute the change in leadership as a result of its former CEO’s resignation; and other risk factors detailed in Electric Fuel’s most recent Annual Report on Form 10-k for the fiscal year ended December 31, 2001, Electric Fuel’s Form S-3 registration statements filed in September 2002, 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.